On 24 August, it was reported that India’s power plant stockpiles have fallen to 15 MMT, which was down 11% WOW and 62% YOY – marking the lowest inventory level since December 2018. This week, reports states that India is urging utilities to import more coal as coal-fired electricity generation rose 16.1% YOY in August.
On our estimates and utilizing AIS data, we find that India’s YTD seaborne coal imports are up roughly 8% on 2020, but down 16% on 2019. Assuming daily imports reach the levels seen in Q1 2019 (following inventory-lows in December 2018), we estimate that India’s seaborne coal imports could rise by c55% from current levels. In our view, this could provide near-term tailwinds for an already strong dry bulk market, as data from India’s Central Electricity Authority states that half of its 135 coal-fired power plants had less than a week’s worth of coal supply left.