shine trader limited reports:
A novel coronavirus pneumonia is reported in India, and many other media reported in October 4th. After the second wave of new crown pneumonia in the country, India’s coal demand is increasing. At present, India’s domestic coal shortage is serious. Although Indian coal companies, which account for more than 80% of India’s coal supply, have pledged to expand production to meet current demand, the rise in imported coal prices is unbearable for Indian enterprises.
According to the data of India’s Central Electricity Authority (CEA), as of September 29, 16 of India’s 135 coal-fired power plants had zero coal inventory. More than 80% of the power plants have less than a week’s inventory, while more than half of the power plants have less than three days’ inventory. As of September 29, India’s coal-fired power plants had an average coal stock of only four days.
With the rise of domestic power demand in India, Indian coal power enterprises are facing serious coal shortage. 70% of India’s energy consumption comes from coal. Although Coal Corporation of India, India’s largest coal producer, has announced to increase supply to meet domestic demand, coal inventories of many coal-fired power plants are seriously insufficient, and it is impossible to meet power production needs in the short term unless coal is imported. However, now coal has become a scarce commodity, and the price has increased by more than 100%, which makes Indian enterprises unable to pay attention.
India imports about 300 million to 400 million tons of coal every year, mainly from Indonesia, Australia and South Africa.
India’s own coal output exceeds 600 million tons. Now India’s coal production is seriously affected by the rainy season, resulting in a shortage of domestic coal supply, and India’s dependence on Indonesian coal imports is increasing. The sharp rise in global electricity coal prices has weakened the willingness of Indian power enterprises to import, and higher input costs will drive up the price of end products.
According to the data of India’s Central Electricity Authority, Indian coal enterprises imported 1.9 million tons of coal in August, a decrease of 42% over August 2020. Due to the lack of domestic supply in the country, many companies have no choice but to reduce production.
India’s industrial electricity consumption has increased significantly after the second wave of COVID-19 this year. In the first eight months of this year, India’s electricity demand increased by 13.2%. In 2020, due to the economic slowdown caused by the epidemic, power demand decreased for the first time in more than 30 years. According to Reuters, in order to meet the growing demand, Indian coal companies supplied about 243 million tons of coal to power companies from April 1 to September 28 this year, 24% higher than the same period last year. Nevertheless, the shortage of power coal supply in India is difficult to ease quickly.
Reprint indicated source：Shine Trader Limited Live information