India’s changing coal imports show quality over quantity – by Clyde Russell (Reuters U.K. – June 21, 2016)

http://uk.reuters.com/

India’s coal imports are in a declining trend, but the energy value is dropping at a far slower pace than the physical volumes as the South Asian nation switches to higher quality fuel.

This is likely as important a trend as the drop in imports as it indicates that major supplier Indonesia is in danger of surrendering more of the Indian market to rivals such as South Africa, Colombia and Russia.

It also shows that India’s thermal coal importers are taking the view that it’s better to pay more for higher grade cargoes than to merely take the cheapest on offer, which shows a rising sophistication in how they are adapting their fuel mixes.

And thirdly, given the Indian government’s stated aim of cutting thermal coal imports to zero over the next few years, importing lower volumes of better quality coal may go some way to placate the authorities.

Fabio Gabrieli, director of commodity strategy at Mercuria, told the recent Coaltrans Asia conference on the Indonesian island of Bali that the key development for India’s coal market was how the calorific value of coal imports wasn’t dropping nearly as fast as the actual tonnage.

For the rest of this column, click here: http://uk.reuters.com/article/column-russell-coal-india-idUKL4N19D17K

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