Coal news and updates

Surge in imported coal arrivals into India likely, prices seen firm

October 23: With two public sector utilities – Haryana Power Generation Corporation Ltd (HPGCL) and Karnataka Power Corporation Ltd (KPCL) – having already placed orders for a total of 3.0 million tons (mt) of imported coal and another order for 5 mt from NTPC Ltd to be placed soon, India is expected to witnessed a surge in the arrival of imported coal in the coming months and a subsequent rise in international coal prices, industry experts believe.

"The supplies against Mahagenco's tender for nearly 3 mt has already commenced while HPGCL and KPCL have placed orders recently and supplies will commence anytime. In addition, NTPC's fresh tender is likely to be finalised within this month or beginning of next month. Once the material against these orders alone starts arriving there will be a sharp increase in arrivals of imported material to India and its impact would be felt in international markets as well," they said.

"It is not only the finalisation of tenders from power utilities that is likely to firm up prices in the international markets, but there are other reasons as well that might cause prices to rise," they added.

"The recent spurt in the prices of South African and Australian steam coal was along expected line as rates had bottomed out and I feel there would be further firmness as the monsoon rains will start in Indonesia. That will restrict supplies to a great extent. From here, prices can only go up," they said.

"Normally, it has been found that coal prices firm up in the first quarter of any calendar because of rains restrict supplies from Indonesia and Australia and also because of higher demand in the major markets during that period," they said.