plants along the coast will remain
strong due to a lack of transport
infrastructure and low coal prices. As a
result of new capacity additions, coal
consumption in the country remains
higher than production, with a
structural deficit of 129 million t in
2015. In the long term, as India
attempts to hit its ambitious plans of
doubling production by 2020 and
production from its auctioned coal
mines finally comes online, imports
are expected to fall. For instance,
during the first eight months of 2015
India’s thermal coal imports grew by
27.7% y/y. Meanwhile, Indian
metallurgical coal imports grew by
17.3% during the first eight months of
2015.
Port bottlenecks to cause
a problem
Indian steelmakers will struggle to
operate at full capacity due to coal
supply constraints. The rush to secure
more seaborne coal in India will
continue to cause heavy congestion at
one of the country’s busiest ports,
which now has twice the number of
vessels waiting than its available
berths. The Paradip port in Odisha is
buckling under the weight of heavy
traffic, with many ships reportedly
taking up to six days to offload their
goods once berthed. According to the
Indian Ports Association, Paradip port
shipments rose 20.2% y/y in 2014 –
with the port handling 16% more coal
during the same period.
Coal to remain dominant
source for electricity
generation
BMI expects coal to retain its primacy
in India over the coming years as
energy poverty remains a key concern.
The fuel will remain the only realistic
option for providing cheap and
abundant energy for the local
population over the BMI forecast
period to 2024. The country’s heavy
reliance and strong appetite for
coal-fired power generation is in
contrast to the other major power
markets around the world. Coal has
been a diminishing fuel in the US and
EU power sectors over the last five
years, driven by a combination of
Growth to ramp up: India – coal mine production (million t) and growth y/y (%).
Source: EIA, BMI.
Port throughput to grow: Port of Paradip throughput ('000 t) and growth y/y (%).
Source: IPA, BMI.
Coal to dominate: India electricity generation by type (2015 – 2024).
Source: EIA, BMI.
18
|
World Coal
|
January 2016
