Coal shipments to India drop 7%

"Between January and October, coal shipments to India dropped 7% y/y due to the increased cost of imports. Thermal coal demand has remained strong, particularly from the power sector, but domestic mining has not kept pace, forcing power plants to draw down inventories. In contrast, coking coal demand growth has eased following a decline in steel production amid low margins,” says Filipe Gouveia, Shipping Analysis Manager at BIMCO.

The cost of imported coal has increased due to a weaker rupee and higher coal prices. Prices have firmed due to increased demand following disruptions in the Strait of Hormuz. As LNG supplies have tightened, the EU, Japan and South Korea have boosted electricity generation from coal. Furthermore, Chinese imports increased at the end of the second quarter following a mining accident that led to mine closures for inspections and thus lower production.

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