Thermal coal imports inch up to a five-month high in April

Thermal coal imports continued to rise for the fourth straight month in April 2024 with cargoes hitting a five-month high as thermal power plants (TPPs) stocked up on the critical commodity in anticipation of a rise in summer temperatures and projections of extended heat waves during the current month.

According to data from energy intelligence firm Kpler, India’s imports of thermal coal, largely consumed by the power sector, rose almost 11 per cent m-o-m and 10 per cent y-o-y to 16.23 million tonnes (MT) last month.

Thermal coal shipments during Q1 2024 were already the highest in the last two years. Kpler data shows that imports rose 23 per cent y-o-y to 42.95 MT during January-March 2024 from 34.85 MT a year ago. Compared to Q1 2022, the inbound shipments rose even higher by 36 per cent from 31.51 MT.

• Also read: India’s thermal coal imports climb to a two-year high in January-March 2024

Scorching summers

Kpler’s Lead Major Dry Bulks Analyst, Alexis Ellender pointed out that the outlook for Indian coal demand remains firm as hot weather drives up thermal coal consumption.

Thermal coal imports climbed to a five-month high of 16.23 MT in April, up by 1.50 MT y-o-y , Kpler data shows. April also included the two highest weeks for inbound shipments since November 2023; both above 4 MT, he told businessline.

“Import demand has remained firm even as domestic coal production continues to rise strongly. Despite this increase in availability, consumption is such that coal stockpiles retreated from their late April peak to the lowest level since March in the first week of May. Nevertheless, stocks remain well above the year-ago level,” Ellender pointed out.

As per government data, coal stocks at domestic coal-based (DCB) power plants stood at 36.05 MT on February 1 rising to 41.77 MT a month later and then to 47.34 MT and 45.40 MT during April 1 and May 1, respectively.

• Also read: India’s coking coal imports at 10-year high, Russia among top three suppliers with 12% market share

At the end of March, coal stocks at DCB plants stood at 47.30 MT after which they declined to 45.48 MT on April 30 and 44.45 MT on May 17.

Thermal power generation in April was up by 10.69 per cent y-o-y, while hydropower generation was down by 8.43 per cent y-o-y, he said.

Cumulative thermal power generation in April stood at 123,504 gigawatt hours (GWH) in April 2024, while hydro power generation totalled 7,993 GWH.

More imports

“Hot weather conditions are likely to persist into at least mid-May. We expect this month to represent the annual peak for Indian thermal coal imports. Hire rates for dry bulk carriers sailing from Indonesia (the world’s largest thermal coal exporter) to India rose to the highest level since October 2022 in the final week of April, supporting the case for further strong arrivals this month,” Ellender said.

Senior government officials said that power demand will rise as mercury soars further north. The week beginning May 19 is expected to witness severe heat waves, leading to a higher demand for cooling. This will also push up imports during May.

The India Meteorological Department (IMD) has predicted that heat wave to severe heat wave conditions are very likely in many pockets over Rajasthan, Punjab, Haryana- Chandigarh-Delhi during May 18-22 and in some parts of West Uttar Pradesh on May 18 and May 19.

Heat wave conditions are very likely in some parts of East Uttar Pradesh during May 18-22; West Uttar Pradesh during May 20-22; in isolated pockets over Uttarakhand, Gujarat State, Madhya Pradesh during May 18-22; Bihar, Gangetic West Bengal during May 18-20; Jharkhand on May 19-20; Odisha during May 20-22.

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