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India's thermal coal import witnesses sharp decline due to poor demand at end use owing to Covid situation

India's thermal coal import witnesses sharp decline due to poor demand at end use owing to Covid situation

Kolkata, Jul 31 (UNI) India's thermal coal imports witnessed a decline during the first six months
of this calendar year, January-June, 2020, lower than estimated, indicating the imports may drop
this year by as much as 25 per cent on year due to Covid pandemic.
Though imports have shown signs of improvement in the current month of July after falling by
around 50 pc on year in May and June, a sluggish economic condition due to COVID-19 induced widespread lockdowns may continue to impact demand for end-use products like steel, cement
and electricity, according to IHS Markit in its July issue on Indian Coal Report said.
India’s thermal coal imports fell 27 per cetn year on year JanuaryJune, as lockdown reduced
industrial activity, which in turn capped power generation.
Analysis of provisional shipping, ports and customs data by IHS Markit shows thermal imports
in January-June was estimated at 73.29 mt, down from 100.55 mt, with Q2 imports coming in at
26.25 mt compared with 53.25 mt in the previous corresponding period.
The slippage in thermal imports in the first half was steeper than its preliminary estimate in April
when it projected an import loss of around 20-23 mt in April-June and a 17-21 pc on year dip in the
country’s thermal imports.
Based on trendline until June of the provisional data, it was now estimated up to 25 pc slippage
in India’s thermal imports as demand is likely to continue to be sluggish and higher domestic coal
availability due to consistent production and pithead stocks hitting 74 mt as on 30 June.
Coal India Ltd (CIL) was already offering additional tonnages to consumers on better payment
terms and conditions, both for supply contracts and e-auction.
Higher pithead stocks prevented CIL from raising its output as it was producing only to the extent
it could dispatch.
This too will weigh on coal imports by sponge, cement and power plants, making imports less competitive unless global prices recede further.
Should domestic demand get better, the miner will be able to raise its output, which stood at
1.33 mt/d in April-June 2020, down 11 pc on year, from 1.50 mt/d. Haulage was 1.33 mt/d, down
21 pc on year, from 1.69 mt/d.
UNI PC SJC

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