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Coal consumption growth in India may remain tepid: Ind-Ra

Press Trust of India  |  New Delhi 

Growth of coal consumption in may remain tepid as plant load factor of thermal power plants (PLF) is likely to drop in the current fiscal, Ratings and Research has said.

The credit rating agency said it expects the PLF to remain at sub-65 per cent in the medium term.

"Ind-Ra expects domestic coal consumption growth in to remain tepid on account of an expectation of a two per cent fall in the FY18 plant load factor of coal-based plants," it said in a report.

Given domestic coal availability is likely to increase, thermal coal may decline by 15-20 million tonnes annually over the next two-three years, it said, adding that this would affect global seaborne trade.

Ind-Ra's price assumption for the benchmark thermal coal (Newcastle 5,500 calories) for FY'18-FY'20 is a band of USD 50-60 per tonne.

policies in large seaborne trade participants are likely to have a significant influence on coal prices.

Persistent substitution to renewable energy from fossil fuels will continue to moderate global consumption growth.

However, supply response to the bleak price outlook is likely to remain strong, as investment plans for large mining capacity have been limited and returns have been unattractive in the past few years.

(This story has not been edited by Business Standard staff and is auto-generated from a syndicated feed.)

First Published: Thu, July 13 2017. 19:28 IST