Fundamentals for Indian coal imports continue to look promising: Torvald Klaveness


Back in August we reported that the fundamentals impacting Indian coal imports looked more promising.

Trade flow data today implies 17.4Mt of imports in November 19.0Mt in December and 16.2Mt in January. Based on trade flow data we estimate imports in Oct-Dec 17 to be up about 30% YoY while we estimate imports in January to be up 17% YoY. The positive outlook has thus come into fruition.

The combined coal stocks at mines and power plants has increased from a low point of 36Mt at the end of October to 48Mt at the end of January. Measured as day’s worth of inventories at power plants, the combined stocks have increased from 24.4 at the end of October to 29.8 days at the end of January. However, this has happened in a period where stocks seasonally tend to increase. Thus, compared to previous years the stocks are still at very low level.

On the demand side, we see some clear signs that Indian economy is recovering from the negative short term effects of the demonetization introduced in November 2016. If we use the data for Indian cement production as a proxy for the activity level we can clearly see how the activity has accelerated sequentially since August 2017.

Thus, we think the imports will continue at a strong pace going forward as the underlying fundamentals continue to look promising.


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