Coal imports drop by 11% to 19 MT tn in July

The monsoon and higher availability of domestic coal have been cited as reasons for the fall in imports

Coal imports declined by 11% to 19.30 million tonnes (MT) in July 2015 compared to the same month of the previous year as higher availability of domestic fuel led power generation firms to defer imports.

"The coal import in July 2014 stood at 21.68 MT (million tonnes). July 2015 import was down by 10.98% compared to July 2014," Viresh Oberoi, the CEO and MD of Mjunction Services, said in an e-mail reply.

Mjunction Services, an e-auction joint venture between Tata Steel and SAIL, is a major online marketplace for steel and coal.

"There were several reasons for fall in imports. First, higher availability of domestic coal prompted power generation companies to defer their imports. Second, there was a tendency among Indian buyers to defer their purchases on account of monsoon that affects handling at some of the Western Coast ports," he said.

Also, some buyers appear to have adopted a wait and watch policy, anticipating further softness in international coal prices, he added.

He further said that overall coal imports by power plants may fall due to increased domestic coal availability, which is visible from the fact that about 30 MT of coal stock is lying with various power plants as on July 29, 2015, compared with a low stock of around 10 MT as on July 31, 2014.

In fact, the coal stock with power plants is hovering around 30 MT level since the beginning of June, 2015, due to higher supplies by Coal India (CIL), he said.

CIL accounts for over 80% of domestic coal production.

In addition, he said the demand for electricity from distribution companies is not growing in the way it was projected to grow. The poor financials of discoms that reduced their purchasing capacity is also one of the reasons for lower-than-expected electricity generation.

In fact, the country's power generation in June was down 6.27% to 88.992 billion units (BU) compared with 94.944 BU in May and was almost flat compared with 88.853 BU generated in June 2014, Oberoi said.

Commenting on the outlook, he said, "We believe coal imports, all categories, will remain the same as the previous financial year and we are looking at around 240 million tonnes for 2015-16."