India's thermal coal imports increased by over 11 percent month-on-month and nearly 10 percent year-on-year in September 2023, reaching 13.69 million tonnes (MT). This rise was driven by growing power demand and the government's mandate to blend 4 percent imported coal.

A senior government official noted that power demand has been consistently increasing due to rising industrial activity and higher household demand, with hot weather in the previous month leading to greater cooling needs.

The official added that imports are likely to remain high or similar in October compared to September, supported by the coal import mandate and rising industrial activity.

According to energy intelligence firm Kpler, Indian thermal coal imports in September reached a three-month high of 13.69 MT, marking a 9.90 percent year-on-year increase. Alexis Ellender, Kpler's Lead Major Dry Bulks Analyst, attributed the higher imports to issues with domestic coal supplies and lower hydropower output. Increased shipments from Indonesia and South Africa helped meet the growth in steam coal imports.

The outlook for thermal coal imports depends heavily on developments in domestic supply and weather conditions. As the Southwest Monsoon retreats, parts of India are expected to experience a resurgence of hot weather conditions. Low coal stockpiles at national power plants and dispatching problems are also expected to support thermal coal imports in October.

India's power consumption increased by nearly 11 percent year-on-year to 140.49 billion units in September 2023, driven by rising industrial and personal consumption. The hot and humid weather further increased the demand for cooling.

According to the Central Electricity Authority (CEA), the power sector consumed 5.58 MT of imported coal in September 2023, up from 5.03 MT in the same month the previous year. In the April-September period of FY24, the number stood at 27.78 MT, compared to 34.30 MT in the previous year.

Coal stocks at domestic coal-based power plants as of September 30 were 21.70 MT, with a daily requirement of 2.6 MT. Thermal power plants operated at a plant load factor (PLF) of 69.25 percent in September, up from 60.23 percent in September 2022. Power generation during the month reached 108,697.62 gigawatt-hours (GWh), compared to 93,295.94 GWh the previous year.

National daily peak power demand set a new record in September, reaching 239.98 gigawatts, surpassing August's peak of 238.19 GW and the Power Ministry's projection of 229 GW.