Thermal & Metallurgical Coal Imports in India Outlook Update Q2 2020
The lockdown imposed across the various countries due to the novel COVID-19 outbreak has had a cascading effect on the coal sector. There was a significant drop in India’s coal import volumes due to both demand and supply-side factors.
Thermal & Metallurgical Coal Imports in India Outlook Update Q2 2020
The lockdown imposed across the various countries due to the novel COVID-19 outbreak has had a cascading effect on the coal sector. There was a significant drop in India’s coal import volumes due to both demand and supply-side factors.
Due to the decline in power demand and closure of industries during lockdown the coal imports have suffered a big blow
The lockdown imposed across the various countries due to the novel COVID-19 outbreak has had a cascading effect on the coal sector. There was a significant drop in India’s coal import volumes due to both demand and supply-side factors. India’s coal import in March stood at 15.74 million tonnes (MT), which means a decline by 27.5% in comparison to last year. The major reason for the decline in coal imports is due to restrictions imposed at various ports in the wake of coronavirus outbreak in the country and also due to the declining demand of the thermal power plants as the renewable plants are given must-run status. The government has mandated State-owned CIL to replace at least 100 million tonnes (MT) of imports with domestically-produced coal in FY 21, this has been done in the wake of government plans to bring avoidable coal imports to zero by 2023-24. CIL has already started to connect with non-regulated sectors like sponge iron, cement & aluminium who import coal for blending purposes or direct use, to meet their fuel requirement domestically through its e-auction schemes to decrease foreign exchange costs.
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Key Highlights
The allocation of INR 50,000 crore by the centre under Aatmanirbhar Bharat Abhiyan for coal evacuation infrastructure is likely to go into the development of coal handling plants, ports and strengthening of the transportation chain.
INR 882 crore has been allocated to the coal ministry by the central government for the development of the coal sector.
The investment worth INR 18,000 crore has been flagged for mechanised transfer of coal through conveyor belts into railways sidings.
Report Insights
Amid the COVID-19 pandemic, thermal coal imports at India's 12 major ports saw a 30.46 per cent plunge at 7.8 million tonnes (MT) in April, as per the ports body IPA. These Centre-owned ports had handled 11.27 MT of thermal coal in the same month of 2018-19.
The government is planning to roll out the next wave of reforms for attracting big-ticket investments from private players, domestic processing of minerals and substituting imported thermal coal with inventory of domestic output for building self-reliance in these areas.
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