Standard Post with Image

India is Banking on the Dip in Global Market Price of Coal

The country is expected to overtake China as the world's top coal importer in 2015, faster than previously expected, traders and consultants said on Wednesday.

Source: ET

SNP Insights:

The fall in global market price of coal (69.27 USD/Metric Tonne to 51.57 USD/ Metric Tonne in a year, Source:Info Mine) may surge India's coal import. This would better facilitate the imported coal based thermal capacities in improving their account books with enhanced margins. With China reducing the degree of coal imports, India might evolve as a top destination for importing countries which may further see a decline in imported coal prices courtesy lack of competition. However, with concerted efforts to enhance the domestic coal production the proposition for India being the largest coal importer might not be realized (safely for the thermal coal). For India close to 50 MT of planned capacities of 1.5 BT of domestic coal production will come from private mines, whose economics might not prove favorable for project developers. It remains to be witnessed whether which may see inclination towards overseas coal, although to be witnessed.