Weak fin health of power cos to affect energy output: Fitch

By: | Published: September 26, 2015 5:41 AM

Fitch Ratings today said weak financial health of the country's state-owned power companies is likely to keep affecting power generation and thus demand for coal".

Fitch Ratings today said weak financial health of the country’s state-owned power companies is likely to keep affecting power generation and thus demand for coal.

India’s import demand overtook those of China’s in first half of 2015, but further increases will depend on how quickly it can ramp up its domestic mining capacity “and the growth in its thermal-power generation,” Fitch Ratings said in a statement.

“India imported substantially more thermal coal in first half of 2015 due to its lower self-sufficiency rate (60 per cent to 70 per cent in 2014), although its total coal use is still less than a fifth of that of China,” it said.

China, which accounts for around 70 per cent of the region’s coal use, is likely to see its demand stay depressed due to a slowdown in industrial activities and a shift in energy mix, it added.

Some smaller and higher-cost players in Indonesia have cut or halted production, but its slow power generation capacity build-up may keep its domestic demand growth slow in the next year or two, Fitch said.

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