India stares at power shortage in summer due to coal crunch

Global thermal coal prices have remained elevated as a fallout of the Russia-Ukraine conflict, which disrupted trade flows and crippled supply amid additional demand from Europe, which has now sanctioned Russian coal.

As a result, imported coal has largely remained out of bounds for price-sensitive markets like India, S&P Global Commodity Insights said.

The shortage level was even higher at 80.08 million units on April 7, which raised concerns among several market participants, who said the crunch was near to mid-October 2021 levels when India faced an acute power crisis as the stockpile at 115 power plants slipped to critical levels.

According to a notice issued by the Maharashtra State Electricity Distribution Company Ltd. on March 31, reviewed by S&P Global, the state has decided to temporarily curtail electricity supply to segments of agricultural power consumers in the state.

Other provinces where high supply shortages were recorded on April 10 include Madhya Pradesh (9.67 MU), the union territories of Jammu and Kashmir and Ladakh (cumulatively 4.65 MU), Punjab (4.5 MU), Haryana (4.39 MU) and Jharkhand (2.29 MU).

S&P Global reported April 1 that India needs to increase thermal coal imports to meet rising power demand during the peak summers, even as import prices remain elevated due to supply tightness created by the Russia-Ukraine conflict.