Delhi, August 2: India’s thermal coal imports experienced a decline in the first half of this calendar year, January-June 2020, lower than expected, suggesting that this year’s imports could drop by as much as 25 percent year-on-year due to Covid’s pandemic.
Despite the fact that imports have shown signs of improvement in the last month of July after falling by about 50 percent year-on-year in May and June, a slow financial condition due to COVID-19 driven across wide lockdowns may continue to affect interest in end-use items such as steel , cement and electricity, as stated in the Indian Coal Report in its January issue.
India’s thermal coal imports dropped 27 percent in June, as industrial activity was reduced by lockdowns, which in effect capped power generation. Analysis of IHS Market’s provisional shipping ports and customs data shows that thermal imports were estimated at 73.29 mt in January-June, down from 100.55 mt, with Q2 imports coming in at 26.25 mt compared to 53.25 mt in the preceding period.
In the first half, the slippage in thermal imports was steeper than its preliminary April estimate when it expected an import loss of about 20-23 mt in April-June and a 17-21 pc fall in the country’s thermal imports in a year.
Given the trendline of the temporary information until June, up to 25 pc slippage was currently assessed in India ‘s thermal imports as request is likely to continue to be drowsy and higher local coal accessibility due to reliable production and pithead stocks reaching 74 mt as on June 30.
Coal India Ltd (CIL) had already provided consumers additional tonnages on better terms and conditions of payment, both for supply contracts and e-auction. Higher pithead stocks prevented CIL from raising its output, as it only produced to the extent that it could dispatch.
This too would weigh sponge, cement and power plants on coal imports, rendering imports less competitive unless global prices fall further. If domestic demand gets stronger, the miner will increase his production, which in April-June 2020 stood at 1.33 mt / d, down 11 pc per year from 1.50 mt / d. Haulage was 1.33 mt / d, down from 1.69 mt / d on 21 pc per annum.
