- India’s thermal coal imports dropped by 31.8% in October, marking the steepest decline in 15 months.
- China’s coal imports surged by 29% in October, highlighting a contrast in energy strategies between the two nations.
- Analysts expect India’s coal imports to remain lower in 2024 due to high inventories and a growing focus on clean energy.
India’s thermal coal imports dropped sharply in October, falling by 31.8% to 13.56 million metric tons. This marks the steepest decline in 15 months, according to data from Bigmint and Kpler. It is also the first consecutive drop since July 2023. Traders linked the decrease to reduced power generation and a rise in clean energy output.
Traders expect imports to rise in the coming weeks, though overall shipments will likely remain lower than in 2023. Imports will likely stay down in the final two months of 2024 due to high coal inventories at Indian ports. “Despite low industrial activity, traders have brought in large quantities of coal,” said Vasudev Pamnani, director at I-energy Natural Resources Ltd. He predicted thermal coal imports for 2024 to stay flat at around 176 million metric tons.
India’s coal import trends have generally mirrored China’s over the past year, which helped support international prices. However, the decline in October marked a clear divergence between the two countries. While India’s imports fell, China’s thermal and metallurgical coal imports surged 29% in October. This increase came mainly from higher thermal coal imports, which put China on track to set another record for coal shipments in 2024.
Despite India’s slowdown, Chinese buyers have continued to rely heavily on coal. Imported coal remains more affordable than domestic coal, making it an attractive option. In contrast, India has favoured cheaper domestic coal in recent months.
Hydropower generation trends in both countries have also influenced coal demand. In China, lower hydropower generation in September led to greater reliance on coal. Meanwhile, higher hydro and solar power output in India reduced the country’s dependence on coal.
India’s power sector has shifted towards cleaner energy, with solar and wind generation playing a more significant role. This shift has reduced the need for thermal coal in the country’s energy mix, resulting in a drop in India’s demand for imported coal. Traders have noted that although industrial activity is sluggish, coal purchases have continued at high levels.
The opposite trend is unfolding in China. The country’s energy mix still relies heavily on coal, particularly during periods of lower hydropower output. The increase in coal imports reflects this continued dependence.
Analysts expect India’s coal imports to stabilise in the coming months. However, with high stockpiles at ports and a focus on clean energy, traders expect annual coal imports to decline compared to 2023.
Overall, the contrasting trends in coal imports by India and China highlight the two countries’ varying energy strategies. While China still focuses on increasing coal use, India’s push towards renewables impacts its import levels. Both nations face challenges balancing energy needs with environmental goals.