Importers shirk from buying thermal coal as INR is mauled in India Carnage in currency market has left coal importers unsettled. Regardless of shortfall from domestic sources the buyers have opted to lay low for the time being till INR stabilizes. Reportedly the currency collapse has been so shattering that many buyers are eager to wriggle out of concluded transactions. Quality has been sacrificed for lower grade coal to compensate for the price hike. Indian buyers were now looking at 3600 kcal/kg to 4200 kcal/kg GAR Indonesian coal which was available in the range of USD 37 to 42 per tonne , FOB. However given the turbulence in FOREX nobody is serious about committing volume till the exchange rate stabilizes. Presently imported material is being lifted on need based basis thereby increasing the inventory at Indian port by 2% within a week to 10.9 million tonne. Slothful economy hitting 4 year low of 4.4% GDP in Q1 obviating the demand for coal from cement manufacturers as the construction sector slumped obviating the need for further buying. India imported 137.5 million tonnes of thermal coal last year with the figure likely to touch 150 million tonnes this year on new capacity addition in power generation and domestic production nearly stagnating. Coal India Ltd the biggest domestic producer has been repeatedly failing to meet the production and off take target raising concerns about the availability and outages. Even though CIL has been bragging about meeting 80% of the FSA requirement thereby obviating the need to import its performance has not been encouraging. During the first five months of the 2013/14 fiscal year, CIL produced 167.3 million tonnes of coal, below a target of 173 million tonnes. Its off-take from April-August was 188.6 million tonnes, compared with a target of 192.4 million tonnes. In this background ambiguity has beset the coal import and trade but it won’t be long before the buying commences regardless of volatility since dire necessity can be ignored at public peril of power outages.
Posted on: Fri, 06 Sep 2013 15:07:26 +0000
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