London: Strong demand for power in India is likely to keep coal imports at the maximum level possible in the June-September monsoon season, coal importers said on Thursday.
In January importers said they expected India to import over 40 million tonnes of thermal coal in 2009 but the total could be higher if imports do not slow substantially as usual during the monsoon.
“Coal consuming sectors such as cement and sponge iron are fairly stable right now, they have good demand but also have built stocks before the monsoon. What will keep imports high is the power sector. We are getting very strong demand from power plants for the summer,” an India-based trade importer said.
China’s surging imports of coal and iron ore have been a much more noticeable factor boosting prices in Asia as well as freight rates, shipping analysts said.
“India’s import demand has been more of a focus in coal than in freight where everybody’s attention is on China because of the scale of what China is doing,” one London-based shipping analyst said.
He added that Indian coal demand is going on steadily in the background.
Indian end-users and stock-and-sale traders have already built stocks of coal at ports ahead of the monsoon but further imports will be needed to meet demand through the summer, traders said.
Indian buyers are carefully comparing prices of different coal origins and switching to South African from Indonesian supplies when they are cheaper but the volume of coal sought per month is little different to that in second quarter, suppliers said.