Bimco estimates that Russian coal could be on its way to India as the country’s coal inventories reach critical levels and the normal partners, Australia and Indonesia, both have limited export opportunities currently.
Chimneys of a coal-fired power plant in India. | Photo: ADNAN /REUTERS / X90166
Shipping organization Bimco states that coal from Russia could find its way to India where the Ministry of Power has instructed power plants to increase imports of coal.
The ministry demands that plants technically designed to operate using domestic coal start important a minimum of 10 percent of the requirement.
”As of 9 May, inventories at 105 Indian powerplants have reached critical levels at less than 25% of normative stock. Countrywide, stocks are down to only 32% of normative stock requirements, equal to nine days consumption at April’s average power plant utilization level,” says Niels Rasmussen, Chief Shipping Analyst at Bimco in a statement.
The reason Russian coal, which would not be sanctioned in India, could end up being imported by the country is explained by the fact that the countries India normally imports from, are having domestic issues hindering export.
“India will attempt to increase shipments from Australia and Indonesia, their main trade partners, but supply-side difficulties could emerge. In Australia, recent heavy rainfall on the east coast is challenging coal logistics, and a requirement to sell 25% domestically limits Indonesian coal miners’ export potential,” says Rasmussen.
Bimco estimates that increased coal imports from India, regardless of where the coal comes from, will add demand to a market that is becoming increasingly strong.
However, if the coal did come from Russia, it would be good for shipping as it adds more tonne miles.
