Train crunch to spur coal imports

14 Apr 2023 CW Team

Due to a lack of trains, Indian businesses, including aluminium smelters and paper mills, are expected to increase thermal coal imports for a second year in a row, even as state-run Coal India seeks to enhance output.

Increased industrial demand for seaborne coal would stymie India's efforts to reduce its reliance on imports from mines in Indonesia, Australia, and South Africa, the world's second-largest producer and importer of the fuel.

As the world's No. 2 economy is recovering from the COVID-19 pandemic, which is supporting global prices, India's demand for seaborne coal is expected to peak during the summer season starting this month.

As a result, India's manufacturers will have to pay extra for both imported coal and transportation because the lack of trains has forced them to receive coal by truck, which is more expensive per tonne than by rail.

In 2022, most India's thermal coal imports came from industrial users.

Abhishek Rakshit, a senior analyst at consulting firm Wood Mackenzie, predicted that logistical difficulties might increase overall Indian thermal coal imports by 3% to 169 million tonnes in 2023. The price of low- to mid-calorific value coal will undoubtedly be supported by growth in Indian coal imports through the majority of 2023, according to Rakshit.

Infrastructure Urban

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