Improved capacity utilisation in power, cement and steel industries, coupled with inadequate rail-connectivity and rake availability to ferry the fuel, has led to raise in coal imports by 8% to 17% annually in FY19, analysts at CARE Ratings said on Thursday.
Global steam coal prices have been on a steady rise amid the falling value of the rupee. The average global coal price was about $116.8 per tonne in August.
Earlier this month, commodity tracker mjunction said that coal imports in the first six months of FY19 increased by nearly 14% to 119.42 million tonne (MT). Coal imports are on the rise even as domestic coal production during April-August grew at 10% annually to 264 MT.
India is the second largest producer and second largest importer of coal after China. Coal supply shortages has partially been responsible for raising spot prices of electricity. The average spot power price at the Indian Energy Exchange (IEX) in September was `4.69/unit, rising about 15% rise annually.
Power prices at IEX touched its ten-year high mark with the tariff for a 15-minute block going up to as high as `18.2/unit on October 3.
Power minister RK Singh had said earlier this year that coal shortage is expected to remain for about three years with rise in power demand. State owned NTPC has called tenders for importing 2.5 MT of coal for its power plants.