As coal block deallocation looms, Glencore, the biggest trader of fuel, sees India imports rising to 180 mt in 2015 and then to 300 mt by 2020.
With deallocation ofcoal blocks putting a question mark on India's ability to meet any significant part of country's energy need, the country could soon overtake China as the world's biggest consumer of imported coal, global analysts including Glencore, one of world's largest trader of coal, predict.
Even as India gears up to import more coal as deallocated blocks are to be taken away from the private developers, China is faced with slowdown in energy consumption coupled with tighter regulations reducing import of low-grade polluting grades of coal.
"Amid weaker Chinese steel demand and lower domestic freight costs, we expect China's import needs to decline, eliminating what had been a key source of growth for the market. We expect global seaborne demand growth to slow considerably, with India the main source of incremental demand going forward," Daniel Rohr, analyst with Morningstar said in a report on Monday.
Glencore of US, producer and marketer of a host of commodities and a major force in global coal market, recently made presentation to analysts on coal that said "India has emerged as the dominant growth market".
In its presentation last week, Glencore said India's coal imports are expected to grow from 170 million tonne (mt) to 180 mt in 2015 and then to 300 mt by 2020.
"While that forecast is at the bullish end of market forecasts, few believe India's heavily regulated mining sector will be able to dig up enough coal to satisfy local demand. India could overtake China next year if only standard grades of thermal coal – bituminous and sub bituminous types – are counted," Commodities Note said on Monday.
India is currently the third-biggest thermal coal importer in the world.
If all kinds of grades are included, India would trail China's total imports of 220 mt in 2014, analysts said.
Glencore's figures are based on assumptions that India's coal-fired power capacity would go up from 145 gigawatt installed now to a target of 214 gigawatt by 2020, leading to 345 mt of fresh demand for coal.
The analysts have also noted current low level of stock of coal lying with the power plants indicating higher imports in coming days.
Country's Central Electricity Authority recently said coal stocks at 56 thermal plants have less than 7 days of fuel stock.
Of the 56 stations, 33 had less than four days of stock, CEA noted.
But rise in Indian imports wouldn't be able to compensate likely drop in Chinese imports as a result of which global trade will fall.
Glencore said global coal imports in 2014 would drop to 308 mt from 312 mt in 2013 but would again rise to 317 mt in 2015 And this would adversely impact global prices.