Heatwave boosts India coal imports - research firm

Last Updated: Tue, Jun 17, 2014 17:19 hrs

Indian coal imports climbed 12 percent in May from the year before, provisional data from research firm OreTeam showed, with power companies scrambling to meet demand as scorching weather drove customers to crank up fans or air conditioning.

Electricity demand hit multi-year highs in many states over the last two months as temperatures soared, forcing the new government of Prime Minister Narendra Modi to firefight public anger over frequent blackouts.

Coal feeds more than half India's power generation and its share is growing despite a local shortage of the fuel.

That means imports continue to march higher, jumping to their biggest for the month of May in at least three years at 15.6 million, said OreTeam research head Prakash Duvvuri.

The country's coal imports stood at 13.9 million tonnes in May 2013 and 15.2 million tonnes this April, according to OreTeam.

The firm collects coal data from its representatives at ports and in mining regions. India's government does not regularly release such numbers.

A stronger rupee has also made imports more attractive. The partially convertible currency gained 2 percent against the U.S. dollar in May.

India has become the world's third-largest coal importer despite sitting on its fifth-biggest reserves of the commodity.

State-run Coal India Ltd accounts for about 80 percent of the country's total output of 562.6 million tonnes, but the company has been falling short of its targets for the past few years due to difficulties in obtaining environmental nods, lack of railway access and employee strikes.

Indonesia is the main seller to India, but talk of limiting production and tightening exports there have prompted some Indian buyers to try and develop alternative suppliers in countries such as Malayasia, traders said.

But shipments would not be an issue in the short term, they added.

"There's a surplus in Indonesia and China's current buying is not typical - they have slowed down," said a Delhi-based trader who buys Indonesian coal. He declined to be named as he was not authorised to speak with media.

India's total coal-based power capacity rose about 1.2 percent in May from April, according to the Central Electricity Authority.

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