(EnergyAsia, November 10 2014, Monday) — India’s coal imports are expected to continue rising through the decade to feed the country’s growing power demand that is being helped by the protracted weakness in the fuel’s price. Amid slumping demand and oversupply around the world, thermal coal prices are holding near a five-year low with little prospects of recovery in the near-term.
Japan’s leading energy think tank has forecast India’s thermal coal imports to rise by 4% to 135 million tons in 2014, and by another 4% to 141 million tons next year.
The pace of coal demand and import growth has picked up speed since the nation’s May 2014 general election which has swept the government of Narendra Modi to power, said Koji Morita, a board member at the Institute of Energy Economics Japan (IEEJ).
Taking a long-term view, another IEEJ scholar, Shoichi Itoh, has projected Indian coal imports to rise from around 100 million tons in 2011 to 350 million tons by 2035.
Glencore, the Switzerland-based commodities trader, is even more bullish as it expects Indian imports of thermal, metallurgical and coking coal to rise from a total of180 million tons next year to 300 million tons by 2020, to possibly overtake China as the world’s biggest buyer of the fuel.
Analysts believe India’s appetite for coal will remain strong as global prices are likely to languish for some years on account of weaker demand in other parts of the world. China, the world’s leading coal importer and consumer, is planning to reduce its dependency on the fuel in favour of natural gas to fight climate change and pollution.
Helped by the plunge in world coal prices, India boosted its import of the fuel by nearly 18.5% to more than 110 million tons in the first half of the current 2014 financial year compared with the same period last year, accoding to an analysis by MoneyControl.