Coal is likely to remain an important source of energy for India

Bhoo Bazar : Dilip Shah

Global coal prices are likely to rise to around $80-85 per tonne in the June-September period.

The outlook for coal demand in India is somewhat mixed, as there are several factors that could affect coal demand in the coming years. On the one hand, India is one of the world's largest consumers of coal, and is expected to rely more heavily on coal for electricity generation in the near future.

However, there are also several trends that could lead to a decline in coal demand in India. For example, the Indian government has set ambitious targets for renewable energy sources such as solar and wind power, which could reduce demand for coal in the long run. In addition, there is growing public concern about the environmental impacts of coal use, which may increase pressure to shift to cleaner sources of energy.

Overall, coal is likely to remain an important source of energy for India in the foreseeable future, but there are also significant challenges and uncertainties regarding the future demand for coal in the country. Coming to global coal prices, coal prices, which had touched $70.5 per tonne last year after peaking at $140 per tonne, are likely to rise to $60-85 per tonne next June-September, as China is starting to stockpile coal to prepare for winter. However, India may consider increasing Russian coal imports in FY 2023-24 to counter the impact of price hike.

Experts say that India will continue to increase its imports from Russia which it gets at a discount of 15-20 per tonne. Initially this discount was as high as 30 dollars per ton. It should be mentioned here that in the financial year 22-23, India imported 18.7 million or 1.87 crore tonnes of thermal coal from Russia. Indonesia still contributes about 80 percent of India's total imports of 167 million or 16.7 million tonnes.

India started importing Russian coal as Indonesian and Australian coal prices rose following the crisis caused by the Russia-Ukraine war, and restrictions related to the corona were eased again in China after the start of the Chinese New Year in March. Like coal oil, Russian coal was blocked in Europe and then made available at subsidized rates to China and India. According to one estimate, in case of any instability, India will increase imports from Russia to balance the adverse effect.

As stated above, India's plans to add 40,000 MW of coal-fired power capacity in the coming years will see an increase in demand for coal in India.

Experts say that several steps are being taken under the Green Revolution to reduce the damage to the environment. However, India and developing economies will continue to depend on coal for growth for the next two decades.

In the short term, prices and imports will depend on how quickly China's economy opens up after the lifting of strict Covid-19 restrictions.

It should be mentioned here that the electricity demand in India was expected to remain high till the beginning of March due to high temperature in the country. Due to this, it was discussed everywhere that the demand for coal will be high, but due to the decrease in heat in April, the situation has improved a lot now. According to the information received, coal stock at thermal power stations around April 19 was about 35 million tonnes, which is said to be 64 percent more than the previous year.

Coal India's pithead stock also rose 13.6 percent to 65.65 million tonnes on April 23, as against 57.8 million tonnes in the same period last year. According to a report, the overall stock including coal mine end, thermal power plant end and stock in transit stands at 117.46 million tonnes, which is 37 per cent higher than the stock of 85.73 million tonnes as on April 23, 2022. The government's initiative to boost domestic production will reduce dependence on imported coal in the medium to long term, sources say. Global coal prices, especially in China and India, are expected to remain higher than the pre-corona average due to higher demand.