premium
  • CRISIL Research
  • Coal
  • Report
  • Premium
  • Power Sector
March 01, 2019

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

 

Rise in power demand, pick-up in industrial activities to boost domestic non-coking coal demand

 

Non-coking coal consumption is expected to clock a CAGR of ~6% to ~1,109 million tonnes (MT) in fiscal 2023 from 827 million tonnes in fiscal 2018, driven by 6.5% CAGR growth in coal-based generation over the same period. Domestic supply is forecast to log a CAGR of 7-7.5% CAGR to 956 million tonnes from 665 million tonnes over fiscals 2019 to 2023. Growth in production will be driven by increase in production from Coal India Ltd (CIL) and commissioning of large captive coal blocks such as Pakri Barwadih, Parsa East and Kente Basan (15 MTPA each), primarily allotted to PSUs. Consequently, the share of imports in non-coking coal consumption is forecast to fall to 13.6% in fiscal 2023 from 19.6% in fiscal 2018. In absolute terms, non-coking coal imports are estimated to decline to 153 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 66 million tonnes in fiscal 2023 from 50 million tonnes in fiscal 2018 at a CAGR of 5.4%, led by growth in steel production. On the other hand, domestic supply is estimated to remain low in spite of logging a CAGR of 8.3% to 17 MT in fiscal 2023. Consequently, the share of imports is forecast to remain high at 85-87% over the next five years. In absolute terms, coking coal imports are expected to increase to 58 MT in fiscal 2023 from 47 MT in fiscal 2018.