Indian buyers have restrained from purchases as coal prices have risen to levels beyond the reach of power utilities in India.

Coal India stated that its pithead inventories are expected to reach 60 MMT by the end of this week, 30% lower than the corresponding period last year, while stocks at utilities stood at 25.5 MMT earlier this week, 13% lower y/y. The fuel’s inventories are sufficient for 9 days, down from 15 days a year ago.

Despite a 5% y/y increase in coal production over the period, market participants report concerns over capacity constraints amid logistical issues stemming from a shortage of freight wagons for railways transportation.

Imports of coal by power utilities have fallen 42% on the year to 23 MMT during April 2021 – Jan 2022. Since the country has shown no signs to doubt energy demand, an increase in imports stand to be a deciding factor on the direction of the situation.