Thermal coal imports seen falling for second straight year

India’s thermal coal imports are expected to fall for the second straight year in 2025 due to decreasing dependence on coal for power generation, slowing economic activity and record high inventories, industry officials said this week.

All six Indian and international coal traders Reuters spoke with at the Coaltrans India conference in New Delhi expected shipments of the fuel to decline this year.

Three of the traders expected imports to plunge by around 10% to about 155 million metric tons. Two of them expected a fall of 1-2%, while another trader forecast a 7-8% decline. None of the traders wanted to be identified as they were not authorised to speak to the media.

The tepid outlook for the world’s second largest importer of the polluting fuel behind China comes as traders are worried about a global coal supply glut. Lower Indian appetite for imports could further pressure prices.

India’s imports of the power generating fuel declined about 2% to 173 million metric tons in 2024, data from consultancy Bigmint showed, due mainly to surging production by the world’s largest coal miner Coal India, which pushed stockpiles at power plants to record highs.

Higher production by Coal India has helped India slash dependence on imports by 5.5 percentage points over a decade to 20.5% in 2024, data from Indian coal trading firm I-Energy showed. The drop in imports were also driven by an increased demand for petroleum coke by the cement industry, as the price-sensitive market preferred the less expensive alternative, the data showed. “2025 is expected to see the cement sector prioritizing petcoke over thermal coal due to its competitive pricing,” Vasudev Pamnani, director at I-Energy said in his presentation, adding that higher production by private miners also resulted in reduced buying by traders.