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'Non-coking coal consumption may grow to 1,076 MT in FY23'
Non-coking coal consumption is likely to grow at a compound annual growth rate (CAGR) of 5.4 per cent to 1,076 million tonne (MT) in fiscal year 2022-23, from 826 MT in fiscal year 2017-18, driven by a 6.5 per cent growth in coal-based power generation, a report said.
The domestic supply is also expected to clock a CAGR of 7 per cent to 931 MT in FY23, from 664 MT in FY18, ratings agency Crisil said in its report.
"The growth will ride on increased production from Coal India (CIL) and commissioning of large captive coal blocks such as Pakri Barwadih, Parsa East and Kente Basan (15 MTPA each), primarily allotted to public sector undertakings," it said.
Consequently, Crisil said, the share of imports in non-coking coal consumption is forecast to fall to 13.4 per cent in FY23, from 19.6 per cent in FY18.
In absolute terms, non-coking coal imports are estimated to decline to 145 MT in FY23, from 162 MT in FY18.
Crisil also expects domestic coal prices to increase 10-12 per cent by FY19, led by hike in prices of non-coking coal for both power and non-power sectors by CIL from January 9 by 12-15 per cent across grades.
Power sector imports are projected to cross 75 MT by FY23, driven by demand from imported coal-based plants as their plant load factors (PLFs) improve following growth in power demand, according to the agency.
However, non-power sector imports are expected to decline to 70 MT due to improvement in domestic supply post linkage auctions and development of key captive blocks
allocated to the non-regulated sector, it said.
Growth in steel production is expected to push up demand for metallurgical coking coal to 65 MT in FY23, from 51 MT in FY18, logging a CAGR of 5 per cent, according to Crisil.
However, domestic supply of metallurgical coking coal is estimated to remain low in spite of logging a CAGR of 9.5 per cent to 19 MT in FY23, it added.
Consequently, the share of imports is expected to stay high at 85-87 per cent over the next five years, according to the agency.
In absolute terms, coking coal imports are expected to increase to 58 MT in FY23, from 47 MT in FY18.
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