Coal use to rise on power uptick: Crisil

Consumption of non-coking coal is forecast to climb to 1,076 million tonnes in fiscal 2023, from 826 million tonnes in fiscal 2018, Crisil Research said in a report. In a sectoral study, Crisil Research also said that non-coking coal imports would decline to 145 million tonnes in fiscal 2023 from 162 million tonnes in fiscal 2018. However, this would be due to lower imports by non-power sector which has seen improved domestic supply after linkage auctions. Overall, the power sector, with improved plant load factors, has driven domestic coal consumption. On coking coal, the report said that imports would remain high as domestic supply of metallurgical coking coal is estimated at 19 million tonnes against a demand of 65 million tonnes in FY23. Global coking coal prices are expected to soften but still be dear at about $ 190 to $200 per tonne this year according to the Crisil analysis, noting a worldwide revival in steel demand. Production too is expected to improve led by resumption of coal mines which were closed earlier and resolution of transport bottlenecks in some of the mining countries. However, these easing of supply constraints may lead to prices dropping to about $175 to $185 per tonne next year, Crisil Research said.

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