India\u2019s thermal coal imports declined to a 12-month low in August 2024, reflecting the seasonal weakness in power demand as widespread monsoon rains brought down temperatures and the need to run cooling equipment.<\/p>\n
Widespread rains, particularly in the north and northwest parts of the country, pushed up hydropower generation and lowered the demand on thermal power plants (TPPs).<\/p>\n
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According to energy intelligence firm Kpler, India\u2019s seaborne thermal coal imports fell by 14 per cent on a monthly basis last month to 11.82 million tonnes (MT). The shipments were almost flat on an annual basis.<\/p>\n
\nSeasonal change
\n<\/h5>\nZhiyuan L, dry bulk commodity analyst at Kpler, saidthe decline in seaborne thermal coal imports was mainly related to the ongoing monsoon rains.\u00a0<\/p>\n
\u201cAbove-normal monsoon rains reduced cooling demand and, thus, the overall power and coal consumption,\u201d he added.<\/p>\n
According to Crisil Market Intelligence & Analytics, electricity demand in India is estimated to have declined by around 5.3 per cent Y-o-Y to around 144 billion units (BUs) last month even as the country received about 7 per cent excess rainfall during the month. This follows a 6.7 per cent Y-o-Y rise in electricity demand in July 2024.<\/p>\n
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Power generation is estimated to have declined by around 3 per cent Y-o-Y at about 155 BUs in August 2024. Coal and renewable energy production contracted around 3 per cent and about 13 per cent, respectively, during the month.\u00a0<\/p>\n
In contrast, hydropower generation surged roughly 7.6 per cent Y-oY after two consecutive months of decline, as many states received ample rainfall, Crisil said.<\/p>\n
\u201cWith the southwest monsoon covering more parts of the country in August, water level in 31 reservoirs and hydroelectric projects ticked up around 1 per cent over a year earlier. Thus, the share of coal and renewable energy in power production increased marginally on-year, while that of hydropower grew to about 15 per cent from around 13 per cent,\u201d it added.<\/p>\n
\nImports to pick up
\n<\/h5>\n\u201cDespite that, the southwest monsoon is expected to be prolonged this year rather than follow the normal pattern of starting to retreat from northwestern India in mid-September. We expect thermal coal imports in September to rebound from the August low as continued weather-related disruptions in domestic coal production and potential restocking efforts following the massively dropped inventories at power plants will likely support the upside for imports,\u201d Zhiyuan said.<\/p>\n
In August, domestic coal production experienced a rare 7.51 per cent Y-o-Y drop and stockpiles at power plants have dropped sharply by over 22 per cent, compared to the March peak, he added.<\/p>\n
India\u2019s coal production and despatch fell to its lowest in over a year and a half with the growth rate slipping into negative territory during August 2024 as widespread and above-normal precipitation impacted mining and mobility.<\/p>\n
According to Coal Ministry data, coal production fell by 7.5 per cent Y-o-Y and more than 15 per cent M-o-M to 62.76 MT, which is the lowest since March 2023.\u00a0<\/p>\n
Similarly, despatch or supply of coal \u2014 mostly to thermal power plants (TPPs) \u2014 declined 6.35 per cent Y-o-Y and 13 per cent M-o-M to 70.39 MT, which is also the lowest in over 18 months, barring in September 2023, when despatch stood at 70.31 MT.<\/p>\n
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