Indian Coal Markets Conference 2009

The world coal industry has been through a sea of change since the last Indian Coal Markets Conference in September 2007, with the international market soaring to unthought of highs by mid-2008, before imploding to see prices at a third of peak levels.

That slump has not been bad news for everybody though and India’s buyers are now looking at the market more seriously than ever. The ambitious coal import plans which were talked about in September 2007 faltered in the face of the historically high prices of 2008. However, with prices back to 2007 levels, India is not only set to be one of the few places increasing demand in 2009, but is also likely to substantially improve on its 2008 growth. The country’s biggest generator - National Thermal Power Corporation - is planning to double its imports this year to 12.5mt and you should expect more state generators to come onto the market.

The coking coal market has also seen huge change. While steel production has collapsed around the world, India’s industry is one of the few still showing signs of life. But last year India paid some of the highest international coking coal prices and this is clearly driving a change in buyer behaviour. When 2008 saw the arrival of the US as a major coking coal supplier into the sub-continent, many saw it as a temporary phenomenon, but it appears that this may not be as short-term as some suspect.

But what about domestic options? If there was a beauty parade for coal qualities, Indian coal would not get the tiara. Nevertheless it has huge reserves and some of the major Indian coal players have been talking of quadrupling production to 2bnt/yr, despite the substantial planning issues that hamper current development. Ultimately the success of these developments will dictate the country’s import levels in the medium and long-term. Meanwhile, the coal IPPs have stuttered over the last two years, with the Ultra Mega Power Projects in particular held up by red tape, and one upshot of the recent volatility in prices is that import coal-fired IPPs seem as keen to ensure access for Indian coal as well as for imports.

The opportunities and issues facing the still growing Indian coal market will be among many topics addressed at the third Indian Coal Markets Conference, which will be held in New Delhi on October 7-8 2009. We look forward to seeing you there.
 

(Website: http://conf.mccloskeycoal.com/story.asp?sectioncode=8&storyCode=53514)