India’s coal imports by the Power sector are expected to appreciate in September 2023 over last month aided by higher demand forcing Power Ministry to direct plants to import 4 per cent for blending with domestic stocks on account of an anticipated coal shortage of 7 mt in H2 FY24.

A senior government official said domestic coal based (DCB) power plants are facing a shortage of coal as the electricity demand has risen due to heat and humidity. Imports are expected to surpass the August 2023 levels.

According to energy intelligence firm Kpler, India’s thermal coal imports rose 8.5 per cent m-o-m to 12.30 mt last month. However, on an annual basis in-bound shipments were lower by 17 per cent.

Higher imports

Kpler’s Lead Major Dry Bulks Analyst, Alexis Ellender told businessline, “Looking ahead to September, we expect robust demand for seaborne thermal and metallurgical coal imports to persist.”

At 8.38 mt, India’s thermal coal imports in September to date (September 20) put it on track to exceed the August total, he added.

“The government measure you cite will support import demand, there is also likely to be some restocking at power plants. Overall power plant stockpiles are down close to 20 per cent m-o-m at time of writing, with stocks at those plants designed to run on imported coal down 16 per cent,” Ellender pointed out.

However, weaker-than-usual rains could mean less weather-related disruption at mining sites and increased domestic supply. September normally represents a low for domestic coal production, with output increasing through the October-December quarter. If the pattern of strong growth in domestic coal production is continued, this will weigh on demand for imported coal later in the year, he explained.

Depleting stocks

Analysing power sector data suggests that coal stocks have been depleting. For instance, the gap between receipt and consumption at DCB plants, which was met by draw down from reserve coal stocks after using imported coal, stood at 2 lakh tonnes per day for the month till September 23, Central Electricity Authority (CEA) data shows.

Till September 23, DCB plants consumed 52.7 mt of coal against a receipt of 46.1 mt The gap met through imported coal was 2.05 mt, while the remaining gap that was met by draw down from reserve coal stocks stood at 4.51 mt, it was around 6.3 mt for August.

In FY24 till September 23, The DCB plants consumed 393.50 mt of coal, against a receipt of 367.9 mt. The gap met by imported coal was 16.4 mt, while the remaining gap that was met by draw down from reserve coal stocks stood at 9.3 mt, it was at around 8.1 mt at the end of August.

Data from the National Power Portal also reflects the decline. The stocks at DCB plants depleted by 4.52 mt between September 1 to 23.

On September 1, coal stocks at DCB plants stood at 27.59 mt (against 23.07 mt on September 23). The percentage of actual stocks vis-a-vis normative stocks was 55 per cent (compared with 48 per cent on September 23). Plants with critical stocks were 40 (September 23: 41 plants).

Between September 1 to 25, India’s peak power demand met during the day averaged at 210.48 gigawatts (GW) against an average peak shortage of 1.46 GW and generation outage of 42.42 GW.

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