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Gap Between Demand and Supply Raise Coal Import by 23 Percent

News

Import of thermal coal jumped 23 per cent to 24.08 million tonnes at 12 major ports in the first quarter of the fiscal, even as the government continues to push for boosting domestic production of the fuel. 

Source: ET

SNP Insight

The increase import shows there is an increasing shortfall between demand of coal and domestic production of coal in the country. The increasing domestic demand and decrease in price of coal in international market may encourage coal import further. Also the monsoon rain may force the power plants to increase their dead storage of high calorific contain imported coal which has less ash percentage and low affinity to water rather than domestic coal which has high ash percentage and high affinity towards water. So, use of imported coal in rainy season may increase the efficiency and reduce the secondary oil consumption of power plants during season. So this may increase the imported coal demand in coming years as long as domestic supply of coal doesn’t match the domestic demand.

Source: SNP Infra Research