Last week saw the release of some of the most critical numbers we’re seen in coal for a long while.
From key consuming nation India. Where fiscal year-end figures for coal imports have begun trickling in from various sources.
The most important stats so far are those from the Indian Ports Association. Which cover imports into India’s 12 major state-owned ports.
Those figures show a substantial increase for the fiscal year ended March 31. With total thermal coal imports up 22%, to 71.6 million tonnes. A rise of about 13 million tonnes from the previous fiscal year.
This of course covers only a percentage of India’s total coal shipments. With the overall import figure set to be substantially higher (I’m predicting somewhere around 130 million tonnes of thermal coal).
Despite the limitations of the data, this is one more sign that Indian thermal coal demand is rising quickly. We should soon get an idea of the scope of the total increase when the government and/or private analysts release their year-end numbers.
I expect these figures could be a major wake up call for the sector. As we’ve discussed before, the global thermal coal market is simply a lot tighter than is widely believed.
Up until now, India’s consumers have been meeting their surging demand largely with increased shipments from Indonesia. But a variety of factors may make Indonesian export growth more difficult going forward–including government caps on national output, and low prices that are seeing some producers struggling to turn a profit of late.
Investors seem to be opening one eye to this situation. With a number of more-positive commentaries on coal having come out of various analyst shops the last few weeks.
The trading action for producers has also been solid. Over the last three weeks global coal player Peabody Energy is up 15%.
Coal prices for their part haven’t bounced much yet. But at least it appears some observers are now anticipating an increase. That alone is a major development for this left-for-dead market.
Here’s to another year behind us,
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