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September 01, 2018

Sector Report: Coal

This report is available to users in India for ₹40,000 + applicable taxes

 

Table of Contents

 

  • Summary
  • Non-coking coal
  • Coking coal
  • Non-coking coal
  • Coking coal
  • Long term price outlook

 

Summary

 

Revival in power demand, commissioning of coal-based capacities, pick-up in industrial activities to boost domestic non-cokingcoal demand

 

Non-coking coal consumption is expected to clock a CAGR of ~5.4% to ~1,076 million tonnes (MT) in fiscal 2023 from 826million tonnes in fiscal 2018, driven by 6.5% CAGR in coal-based generation over the same period. Domestic supply is forecastto log a CAGR of 7.0% CAGR to 931 million tonnes from 664 million tonnes over fiscals 2019 to 2023. Growth in production willbe driven by increase in production from Coal India Ltd (CIL) and commissioning of large captive coal blocks such as PakriBarwadih, Parsa East and Kente Basan (15 MTPA each), primarily allotted to PSUs. Consequently, the share of imports innon-coking coal consumption is forecast to fall to 13.4% in fiscal 2023 from 19.6% in fiscal 2018. In absolute terms, non-cokingcoal imports are estimated to decline to 145 MT in fiscal 2023 from 162 MT in fiscal 2018.

 

Rise in steel production to stoke coking coal demand

 

Demand of metallurgical coking coal is expected to go up to 65 million tonnes in fiscal 2023 from 51 million tonnes in fiscal2018 at a CAGR of 5%, led by growth in steel production. On the other hand, domestic supply is estimated to remain low inspite of logging a CAGR of 9.5% to 19 MT in fiscal 2023. Consequently, the share of imports is forecast to remain high at85-87% over the next five years. In absolute terms, coking coal imports are expected to increase to 58 MT in fiscal 2023 from47 MT in fiscal 2018.