CARE Ratings in its latest coal update, expects production to grow by 2-3% in the financial year FY22. India’s coal production has risen by 19.3% yoy to 54.4 million tonnes (mt) in July 2021 over a low base.
The country’s coal despatch increased by 21.7% yoy to 62.3 mt in July due to higher demand from the power and the cement sector.
Going forward, CARE said that coal production is expected to grow by 2-3% at 730-745 mt in FY22 compared with 716 mt in FY21.
“Demand for both thermal and coking coal is expected to remain strong as global economic activities improve after the covid-19 downturn in the second half of CY2021,” CARE added.
Further, CARE said that the “sharp uptrend in seaborne coking coal prices during the June quarter is likely to continue and we expect stronger prices in the second half of CY2021 as the global supply-demand balance continues to remain tight.”
On a geographical basis, CARE said that ex-China demand particularly from India is expected to improve with the second wave of the Covid-19 pandemic getting largely under control and acceleration in vaccination drive. Demand from Japan, Europe are also expected to remain strong.
Source: Care Ratings