China, India boost seaborne thermal coal imports as power demand surges

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China, India boost seaborne thermal coal imports as power demand surges

Energy 02 Apr 2024 12:07 PM IST Reuters

China and India lifted imports of seaborne thermal coal to three-month highs in March as the world's two biggest buyers took advantage of lower international prices of the fuel to meet strong domestic power demand.

China, the world's biggest coal producer and importer, saw arrivals of seaborne thermal coal of 29.7 million metric tonnes in March, according to data compiled by commodity analysts Kpler.

This was up from 23.03 million tonnes in February and was also higher than the 28.62 million in March 2023. For the first quarter, China's seaborne imports of the grade of coal used mainly to generate electricity were 80.64 million tonnes, up 17.2% from the 68.82 million recorded in the same period in 2023.

The strength in China's imports is being driven by a combination of strong growth in power demand and by seaborne prices being competitive with domestic coal.

Official data showed China's power consumption was 11% higher in January and February this year compared to the same months in 2023, and power generation rose 6.9% in 2023, outpacing the 5.2% growth rate for the economy as a whole.

China's electricity demand is being boosted by a variety of factors, including increasing electrification of the vehicle fleet, higher demand from air conditioners and appliances, and increased electrification of industrial processes, such as some types of smelting.

A drop in hydropower output amid drought has also boosted fossil fuel generation, predominantly coal-fired, further lifting demand for the fuel. China's domestic coal prices have also remained relatively high with thermal coal at Qinhuangdao ending at 825 yuan ($114) a tonne. While this is down from a recent peak of 940 yuan on February 27, the prices of seaborne grades popular in China have also been declining.

Also Read : India hydropower output records steepest fall in nearly four decades Ukrainian steel production drops 10.9 Mn metric tons in January

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China, India boost seaborne thermal coal imports as power demand surges

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