Indian petcoke ban to boost coal imports

- Reuters, NEW DELHI/SINGAPORE

Nov 2, 2017-

A ban on petroleum coke around New Delhi starting from Wednesday will require the country to raise its imports of coal to replace the fuel, just as Asia is heading into the tightest market conditions for coal in years.

India’s annual demand for petroleum coke, an energy intensive fuel that emits harmful sulphur oxides and ample carbon dioxide when burned, has doubled to 27 million tonnes in the past four years. The country imports about 14 million tonnes 

annually, mainly from the United States.

Its use was banned around New Delhi to rein in pollution. The country’s environmentalists are trying to stop imports of petroleum coke, known as petcoke, which emits sulphur oxides that are known to cause lung disease and acid rain.

To replace petcoke, industries from dyeing units to brick kilns are switching to imports of coal.

The national capital region alone consumes 2.2 million tonnes of petcoke a year. A country-wide import ban would require replacing 14 million tonnes of petcoke a year with 24 million to 31 million tonnes of coal, according to industry calculations, most of which has to be imported.

Jamil Rahman, a coal trader in Madhya Pradesh, said he has been getting enquiries about replacing local petcoke with Indonesian thermal coal.

Some enquiries were also made about replacing petcoke with high grade, low-sulphur coal from the US, traders said.

 “Moving to coal is inevitable,” said Lalit Goel, the head of a textile industry body around New Delhi.

The increased demand for coal to replace petcoke, which will largely have to be met by imports, coincides with increasing coal consumption in India for power generation.

India is the world’s second-biggest buyer of foreign coal even though imports have held steady in the last two years because of rising local output.

But demand has picked up in 2017 and coal-fired power plants were left with only five days of inventories on average as of October 26, compared with 15 days at the end of 2016.

 “Indian coal imports will gain momentum in Q4 2017, especially for Indonesian coal,” said Rodrigo Echeverri, head of hard commodities research at Noble Group, at an industry event last week.

India’s coal imports will top 18 million tonnes in October for the first time since the middle of 2016, according to ship tracking data on Thomson Reuters Eikon.

Published: 02-11-2017 09:22

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