Published on : 04/05/2022 – 00:20
India is in need of coal. Faced with the heat wave and too low stocks, the country is in a hurry to increase its imports. A goal that could push up already very high world prices.
India’s needs are enormous. 37 million tonnes by the end of October, including 19 million tonnes by June. This is the objective that the government has set itself. It is up to private and public importers to apply it.
The requested volume aims to respond to the country’s most serious energy crisis for at least six years. A crisis accentuated by a historic heat wave, which makes air conditioners run more than usual and which leads to additional pressure on coal stocks. They were already very low in recent months and since then they have not stopped melting. For several of the 165 power stations, they would only be left for a single day and at least 8 have been shut down since this weekend.
Local production lower than expected
India, the world’s second largest importer, had not anticipated such strong demand, and despite the authorities’ desire to develop renewable energies, the country still depends more than 70% on coal. Demographic pressure and the rise in the standard of living are continually increasing needs.
National coal production – India is the second largest producer, behind China – is not enough to fill the gap, especially since it is even below the targets set by the authorities. For the month of April alone, the country produced 7% less than expected, ie 61.7 million tonnes instead of the expected 66.8.
Indian demand may weigh on prices
New Delhi will have to import massively and at a high price given the cost of sea freight. Its salvation may come from Russia, which could sell its coal at a good price if the European outlet were to close.
This Indian demand should tighten world prices a little more, and perhaps bring them back to the historically high level of March. At 325 dollars per tonne, they are already three times higher than the average of 100 dollars observed in recent years: soaring gas prices have prompted many thermal power stations in several countries to switch back to coal, whose prices have been automatically pulled up.