India’s thermal coal imports rose to a 18-month high in May at 17.79 million tonnes (mt) as electricity generators stocked up the resource in anticipation of higher power demand during April-June, the peak consumption period.

In April 2025 as well, imports were at a 11-month high of 15.40 mt as TPPs stocked up the fuel.

Overall, coal imports, including coking coal, surpassed 25 mt last month, data from global real-time data and analytics provider Kpler said.

Ellender, Senior Lead Dry Bulks Insight at Kpler, noted that India recorded the first annual growth in seaborne coal imports since August 2024 as shipments rose by 1.45 mt y-o-y to 25.11 mt in May 2025.

Stocking up

“This reflected (in) both strong thermal imports and growth in metallurgical coal volumes against a weak base. With the arrival of early rains depressing domestic thermal coal demand, we expect May to represent the seasonal peak for Indian coal imports,” the official told businessline.

Thermal coal imports exceeded Kpler’s expectations and climbed to a year-to-date high of 17.79 mt in May, close to flat on the year-ago level.

“Power sector was the main driver however, firm demand for South African coal from the sponge iron industry was also a factor. Demand from the cement sector also proved robust. With monsoon rains depressing electricity demand, we expect trade data to show thermal coal imports slowing month-on-month to 15-16 mt in June and continuing to retreat at the start of the July-September quarter,” he said.

With ample domestic stockpiles, there is no urgency to import. Demand from sponge iron producers has also slowed as a tightening of profit margins pushes them to scale back production, Ellender added.

Metallurgical coal imports jumped 1.37 mt y-o-y in May to 7.04 mt. Falling prices have made imports more attractive. However, annual growth last month was boosted by a weak May 2024 (5.67 mt).

Metallurgical coal imports are expected to follow the seasonal pattern and slow through June and July, he said.

Subdued demand

Coal consumption by thermal power plants (TPPs) declined by almost 8 per cent y-o-y to 73.7 mt during May 2025.

According to the Central Electricity Authority (CEA), the cumulative coal stock, including imports, at TPP end fell 3 per cent y-o-y to 77.3 mt in May 2025.

Domestic supplies to TPPs declined by a little over 1 per cent y-o-y to 71.8 mt last month. Imported supplies were also lower by 20 per cent on an annual basis at 5.5 mt.

Consequently, the pan-India coal despatch, or supply, fell by 1.91 per cent y-o-y to 89.22 mt during May 2025, the first such fall in nine months. Dispatch to the power sector fell by 1.68 per cent y-o-y to 72.98 mt, Coal Ministry data said.

Analysts said the decline could be due to lower demand for coal as unseasonal rains brought down summer temperatures thereby leading to lower electricity consumption.

As a result, coal-based power generation fell by 9.27 per cent y-o-y in May. Similarly, overall power generation last month was lower by 5.49 per cent on an annual basis. Coal based power generation decreased by 4.24 per cent on a monthly basis.

Lower despatch of the commodity, which accounts for a lion’s share of power generation, also reflects in the number of railway rakes deployed to transport the resource. The rake movement for the power sector fell by roughly 2.38 per cent y-o-y to 287 rakes per day last month.

Published on June 29, 2025