The slowing in imports reflects wider weakness in the Indian economy, projected to expand by just five per cent in 2019/2020 fiscal year, the lowest pace in 11 years.
“A demand downfall across sectors has had a downward cascading effect on everything including coal imports,” said Puneet Gupta, founder of online coal marketplace Coalshastra.
Imports of thermal coal – used mainly for electricity generation – fell 10.7 per cent to 15.62 million tonnes in October. But imports for the 10 months to October were 12.6 per cent higher at 163.86 million tonnes, according to data from the Ministry of Coal.
India has embarked on liberalisation of its coal industry, promising to open up mining to private companies.
But progress has been slow, meaning imports kept growing until August, after which the economic slowdown deepened and hit seaborne coal trade.
Worker strikes and the heaviest monsoon in 25 years were behind five straight months of production decline at state-run Coal India, which produces over four-fifths of the country’s coal.
Indian coal-fired utilities, which account for over three-quarters of overall consumption, boosted imports of thermal coal by nearly a third during the first 10 months of 2019.
The Mundra plant run by Adani Power accounted for the lion’s share of the increase, with imports almost doubling to 14.7 million tonnes, or over a quarter of all thermal coal imports by Indian utilities in the January-October period.
Indian imports of thermal coal from South Africa grew by a third to 25.36 million tonnes in the April-Oct period, displacing imports from Indonesia and the United States as South Africa offered cheaper prices for better-burning high calorific value coal, traders said.
Imports of coking coal – used in steelmaking – also fell during the months of August, September and October. Coking coal imports were little changed at 42.28 tonnes during the 10 months to October.
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