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India to boost coal imports this year to cope with harsh weather, freight snags: Report

India's record domestic output of coal has eased tight inventories at power plants, to an average 12 days' supply at the end of 2022 from nine days when the current fiscal year began last April.

India's power utilities will likely boost coal imports this year to cope with surges in demand, made worse over the past year by extreme temperatures, and with freight bottlenecks that are disrupting domestic coal supplies, analysts and officials said.

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A steady rise in industrial electricity use in recent years has left utilities in India, one of the world's fastest growing major economies and the second-largest coal consumer and importer, with limited leeway to confront extraordinary demand or hiccups in supply.

Additional buying by India on the world market, where it gets nearly a quarter of its coal, could also support global coal prices, along with top importer China's push to ramp up industrial activity after it eased its strict COVID 19-related restrictions. Prices have cooled since hitting a record high in June, due mainly to a warmer-than-expected European winter.

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India's record domestic output of coal has eased tight inventories at power plants, to an average 12 days' supply at the end of 2022 from nine days when the current fiscal year began last April.

But stocks are still far below federal guidelines that recommend at least 24 days' supply as a buffer against the sort of power outages India suffered last year and the year before.

"Even now, about 31% of the total coal-based capacity is facing critical coal shortages," said Abhishek Rakshit, a Senior Research Analyst at Wood Mackenzie.