The International Energy Agency (IEA) said coal demand in India would reach 748 million tonne (MT) in calendar year 2024, making it the world’s fastest-growing coal consumer in absolute terms. Domestic coal production is seen to reach 537 MT that year, recording the strongest increase in coal production globally. The Paris-based inter-governmental organisation, in its latest market report titled “Coal 2019”, noted that rapid economic growth in the country would necessitate higher coal-fired electricity generation as well.
“Its coal demand therefore grows almost twice as much as China’s and on its own offsets declining demand in North America and Europe,” IEA noted. Rising demand from India is seen to benefit global producers with Russia seen to increase the capacity of its Taman port, targeting the Indian market. Most of Mozambique’s coal exports are expected to come to India. “India also presents an important export opportunity for Australia,” the report said.
India is the world’s second-largest coal importer with imports rising drastically in the recent years to meet the requirements of power plants. While 143 giga-watt (GW) of power plants blend imported coal with domestic fuel to increase efficiency, more than 18 GW of generation units are designed to run exclusively on imported coal. Indian power plants imported nearly 40 MT of coal in the April-October period this year, recording an annual growth of 17.6%. Most of the import requirements are met from Indonesia and South Africa. In 2018, India also became the largest destination of US coal.
Increasing steel demand and a shortage of high quality coking coal is also seen to make India the growth engine for metallurgical coal, prompting increase its imports and driving global seaborne trade growth. According to the Indian Steel Association, the country’s steel demand is forecast to grow by over 7% in both FY20 and FY21 as infrastructure construction, automobile and railway activities increase.
India’s overseas metallurgical coal imports is seen to grow by 6.3% per year, from 49 MT in 2018 to 69 MT in 2024 as a result of rising demand and stagnating met coal production. “India’s imports are expected to shift gradually towards Russia, as the countries have signed a memorandum of understanding on energy co-operation that specifically includes coking coal,” the report said.
