India’s imports of thermal coal plunged by about a third on an annual basis in October, according to data analytics firms Bigmint and Kpler, due to slowing power generation and higher clean energy output.
Shipments into the world’s second-largest coal importer plunged 31.8 per cent to 13.56 million metric tons, Bigmint data showed.
This was the fastest rate of contraction in fifteen months, and the first consecutive decline since July 2023.
Traders expect Indian purchases to pick up in the coming weeks, but that will not be enough to lift total annual imports above 2023 levels as shipments are expected to fall in the last two months of 2024 due to high inventories at ports.
“Despite low industrial activity, traders have bought a high amount of coal into India,” said Vasudev Pamnani, director at Indian coal trading firm I-energy Natural Resources Ltd, adding that thermal coal imports for the year 2024 are expected to be flat at about 176 million tonnes.
Indian shipments of the fuel used mainly for power generation have been tracking the trajectory of growth in shipments by top importer China over the last year, shoring up international prices.
The decline in Indian imports in October was the first major divergence between imports by India and China since mid 2023.
China’s imports of thermal and metallurgical coal rose 29 per cent in October – mainly due to higher thermal coal imports – putting shipments of the fuel on track to reach another record high in 2024.
While price-sensitive Indian buyers have shown a preference for cheaper domestic coal in recent months, analysts say imported coal has a price advantage over the domestic variety in China.