Falling demand from India which recorded a decline in imports

Global coal prices edged lower on Tuesday (12/11/2024), triggered by lower demand from India which recorded a significant decline in imports in October 2024.

Referring to trade data, ICE Newcastle coal prices for December contracts fell by 0.17% to US$ 143.75 per ton. This trend is in line with the latest report showing that India's thermal coal imports plunged 31.8% to 13.56 million metric tons compared to October last year. This is the lowest level in 15 months, as the use of coal in power generation decreases and the contribution of green energy increases.

Over the past two months, India's coal imports have shown a consistent pattern of decline. Analysts expect that until the end of the year, Indian coal demand will remain sluggish. Although a small spike is expected in the near term, India's total imports in 2024 are projected to be similar to 2023, at around 176 million tons.

“India is still importing large amounts of coal despite its slowing industrial activity. However, overall, the annual volume is expected to remain stable,” said Vasudev Pamnani, Director of I-energy Natural Resources Ltd.

In contrast to India, China recorded a significant increase in coal imports in October 2024, with an increase of 29%. This increase is due to the rising demand for coal-based energy amid declining electricity output from hydropower. This difference in import patterns between the two Asian majors marks a significant change since mid-2023.

Market participants are now scrutinizing the effect of changing energy patterns in India and China on coal price movements in the global market, given that both countries are major consumers that dictate international coal demand.