India’s thermal coal imports shrink to a six-month low in July

India’s thermal coal imports declined to a six-month low in July 2024, reflecting the seasonal weakness in power demand as monsoon rains lashed the country bringing down temperatures and the requirement for cooling.

Growth in hydropower and wind energy segments also aided in lowering electricity demand from thermal power plants (TPPs).

According to energy intelligence firm Kpler, India’s seaborne thermal coal imports fell, albeit marginally, by 1 per cent on a monthly basis last month to 13.57 million tonnes (mt).

However, the in-bound shipments were higher by 21 per cent y-o-y reflecting India’s growing industrial and commercial base.

Imports losing steam

Kpler’s Lead Major Dry Bulks Analyst, Alexis Ellender told businessline, “Indian thermal coal imports slowed to a six-month low of 13.57 mt in July as a combination of lower-than-usual monsoon season temperatures and firm hydropower and wind generation output lowered energy demand for air conditioning.“

Nevertheless, July thermal coal imports were still up by 2.39 mt y-o-y, supported by underlying growth as the country’s economy expands and industrialises, he added.

Ellender pointed out that India’s domestic thermal coal supply situation remains robust.

“Coal stockpiles at power stations monitored by the Central Electricity Authority (CEA) were still above 45 mt at the end of July, around a third higher y-o-y. At the same time, annual growth in domestic coal production last month went up by 6.36 per cent y-o-y to 74 mt, although lower m-o-m due to monsoon-induced disruption to mining operations,” he added.

The rate of annual growth in India’s domestic coal production is likely to be lower in the coming months due to the higher base in 2023, he emphasised.

The country’s power demand has also come down in the past couple of months as showers have cooled down temperatures.

During July, India’s energy consumption rose by around 4 per cent y-o-y to 145.4 billion units (BU). Compared to July, energy consumption rose by 9 per cent on an annual basis to 152.4 BU in June 2024.

Similarly, energy consumption grew 15 per cent y-o-y to 156.31 BU in May, when India’s peak demand hit a record 250 gigawatts (GW).

Besides, coal production rose by roughly 7 per cent y-o-y to 74.07 mt in July 2024. Despatches of the critical commodity were higher by around 5 per cent to 79.54 mt during the same month.