(Corrects TWh to KWh in paragraph 5)
By John McGarrity
LONDON, Feb 14 (Reuters) - India has the potential to be the
saviour of the global thermal coal market amid plentiful supply
and a likely fall in demand in developed countries, but a
sustained boom in imports on a par with China is unlikely,
Macquarie said Wednesday.
Its estimate that India's coal imports will rise 30 percent
in financial year 2012 to around 107 million tonnes comes
against the background of growing expectations Asia's
third-largest economy will be key to dictating the direction of
coal prices in the years to come.
But India's lower per capita power consumption, older
infrastructure, lack of economic incentives to long-term
electricity supply and much smaller industrial sector will mean
its coal demand will lag far behind neighbouring China.
"On typical metrics India has the potential to be the
saviour of the seaborne thermal coal market, but we still think
market expectations are too high," the Australian bank said in a
commodities report on Wednesday.
Macquarie added that Indian electricity consumption of 800
KWh per capita put it far behind other big developing economies,
particularly China, which consumes 3500 KWh per capita.
"For GDP and electricity generation for China and India, and
the differences are stark. For the past ten years China has seen
electricity generation grow at rates higher than GDP, where
Indian consumption has underperformed," Macquarie said.
Other analysts had touted India as increasingly key to
determining global prices, while traders point to the country's
growing requirements of particular grades such as lower quality
Indonesian material and higher specification South African coal.
Domestic coal output has failed to keep pace with capacity
growth in the power sector in India, where energy production
falls far short of the demands of a fast-growing economy and an
increasingly affluent population.
Macquarie said India's thermal coal imports would rise to
120 million tonnes this year and reach 171 million by 2017,
while in China estimated imports will rise to 209 million tonnes
over the next five years.
But Macquarie said by the end of this decade, India's move
towards self-sufficiency in coal would mean imports would tail
India plans to spend $3 billion on upgrading its railways
around its major coalfields, freeing up 300 million tonnes of
coal annually, the bank said.
Before then, India's domestic coal output, which currently
meets around 80 percent of demand, is unlikely to rise fast
enough in order to reduce reliance on imports, India's main
producer said Thursday.
India has an installed power capacity of nearly 211,000
megawatts, up 48 percent since 2007, largely because of the
construction of new coal-fired power stations.
(Additional reporting by Malini Menon in Delhi; Editing by