According to MB Shipbrokers, India’s coal imports have declined for seven consecutive months but the sharp drop in international prices could help reverse the trend as imported coal becomes more economically attractive than domestic supply.
Newcastle coal futures fell below USD 97/tonne in April, down over 20.0% year-to-date and nearing a four-year low, driven by ample supply from top global exporters. The price reduction in seaborne coal coincides with the onset of India’s extreme summer season, which typically boosts electricity demand.
Furthermore, on 8 April the India Meteorological Department issued the first heatwave alert of 2025, warning of hotter-than-normal conditions across April to June, with red and yellow alerts in key coal-consuming states like Rajasthan, Gujarat, and Uttar Pradesh.
In addition, falling e-auction premiums, squeezed profit margins, and rising inventories could push state miner “Coal India” to scale back production, countering recent state efforts to boost domestic output.
While high inventories may weigh on Coal India’s profits, they could offer a strategic buffer for India ahead of the expected heatwave. According to MB Shipbrokers, an increase in imports could support dry bulk demand in the near term, though elevated inventories may cap overall import upside during the summer peak.
