India is set to overtake China as the biggest importer of power-station coal, emerging as the leader of a clutch of regional nations that miners including Glencore Plc and BHP Billiton Ltd. can tap for new orders.
Indian thermal-coal imports will surpass China’s by 2017 or sooner, Bloomberg Intelligence analysts William Foiles and Andrew Cosgrove said in a report. China, the world’s biggest energy consumer, is cutting down on coal use to fight pollution.
India and its regional peers including Indonesia, Vietnam, Japan and South Korea plan to increase their combined coal-fired generating capacity by more than 204 gigawatts, or 60 percent, through 2019, according to the report.
Still, that may not be enough to trigger a price rally. A decline in coal supplies from Indonesia, the biggest exporter, and the gap between India’s demand and local output will help shape the outlook for thermal-coal prices, the analysts said.
“India will have the largest impact on seaborne thermal coal markets as lofty domestic production targets battle with likely swelling imports due to a wave of new demand from new generation plants,” Bloomberg Intelligence said.
State-run monopoly Coal India Ltd., which produces more than 80 percent of the nation’s coal, has said it will double output to about 1 billion metric tons in five years. That means almost doubling the pace of growth in its annual production.
India’s thermal-coal demand will probably increase 42 percent to 1 billion tons in the six years to 2020, according to the report.