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May 04, 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

 

Capacity additions in power to drive domestic non-coking coal demand Non-coking coal consumption is expected to increase at a CAGR of ~5% to about ~960 million tonnes(MT) in FY 2022 from 742 MT in FY 2017, driven by coal based capacity additions of ~35 GW in power sector. Over the same period, domestic supply is anticipated to grow at apace of 7% CAGR to 846 MT from 598 MT. The growth in production will be driven by rising production from Coal India Limited (CIL) as well as commissioning of a largecaptive coal blocks primarily allotted to PSUs such as the Pakri Barwadih and Parsa East & Kente Basan (15 MTPA each). Consequently, share of imports in non-cokingconsumption is forecast to fall to 11% in FY 2022 from 20% in FY 2017. In absolute terms, non-coking coal imports are estimated to decline to 117 MT in FY 2022 from 149MT in FY 2017. Rising steel production to boost domestic metallurgical coking coal demand.

 

Demand of metallurgical coking coal is expected to rise to 64 million tonnes in FY 2022 from 50 million tonnes in FY 2017 at a CAGR of 5.1%, led by growth in steel production.On the other hand, domestic supply is estimated to remain low, in spite of increasing at a CAGR of 7.1% to 19 MT in FY 2022. Consequently, share of imports is forecast toremain high at about 75-77% over the next five years. In absolute terms, coking coal imports are expected to increase to 57 MT in FY 2022 from 42 MT in FY 2017.

 

Non-coking price hike by CIL to increase domestic linkage as well as e-auction prices inFY 2019.