The report, prepared by Crisil Research, also said that growth in steel production is expected to push up demand for metallurgical coking coal to 65 million tonne (mt) in fiscal 2023 from 51 mt in fiscal 2018, logging a compound annual growth rate of 5 per cent.
It said the consumption of non-coking coal is estimated to clock a compound annual growth rate (CAGR) of 5.4 per cent to 1,076 million tonne in fiscal 2023 from 826 mt in the last fiscal.
"The share of imports in non-coking coal consumption is forecast to fall to 13.4 per cent in fiscal 2023 from 19.6 per cent in fiscal 2018. In absolute terms, non-coking coal imports are estimated to decline to 145 million tonne in fiscal 2023 from 162 mt in fiscal 2018," the report said.
Power sector imports are projected to cross 75 mt by FY23 driven by demand from imported coal-based plants as their plant load factors (PLFs) improve following growth in power demand, it said, adding that non-power sector imports are, however, expected to decline to 70 mt due to improvement in domestic supply post linkage auctions and development of key captive blocks allocated to the non-regulated sector.
The report said international non-coking coal prices increased 35 per cent on average in 2017 due to rise in demand from China, India and other coal importing countries such as South Korea.
However, supply remained subdued due to mining disruptions in Australia and mine closures due to safety concerns in China. The premium of Australian coal to that of Indonesian coal remained relatively high, leading to a spurt in Indonesian coal exports pushing prices upward in 2017, it said.
However, domestic supply of metallurgical coking coal is estimated to remain low in spite of logging a CAGR of 9.5 per cent to 19 mt in fiscal 2023, the report pointed out.
"Consequently, the share of imports is forecast to remain high at 85-87 per cent 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," it added.
(This story has not been edited by Social News XYZ staff and is auto-generated from a syndicated feed.)
