India's thermal coal imports increased on the year in May, reversing an eight-month decline, lifted by pre-monsoon stocking activity and an anticipated seasonal increase in utility coal burn.

India imported 18.65mn t of thermal coal in May, up by nearly 12pc from a year earlier and over 19pc higher from 15.65mn t in April, according to data from shipbroker Interocean. Coal arrivals grew by double-digit percentages on the year across key origins, including Indonesia, South Africa and Russia.

India's total imports over January-May stood at 72.6mn t, down by 4pc from 75.55mn t in the same period a year earlier, according to Interocean data.

The surge in imports last month may also have been partly triggered by falling prices in key origins, including Indonesia. Indonesia's key GAR 4,200 kcal/kg coal prices slumped to a four-year low in May, averaging $46.10/t fob Kalimantan basis Supramaxes. Prices remain under pressure on ample supplies and weak demand from key buyer China, hitting a fresh multi-year low of $39.40/t fob Kalimantan on 20 June.

Indian demand for imported coal has broadly been capped this year because of abundant domestic supplies and an easing coal-fired generation. Indian coal producers' stocks stood at nearly 123mn t as of 31 May, up by 29pc from 95mn t a year earlier. Meanwhile, domestic output continues to edge higher. The country's total coal output stood at 168mn t over April-May, the first two months of the April 2025 to March 2026 fiscal year, growing by 3.4pc on the year.

India's coal-fired generation, which meets most of its power requirements, was at 108.82TWh in May, down from 119.54TWh a year earlier and 113.48TWh in April, Central Electricity Authority (CEA) data show. The decline was partly the result of higher hydro and nuclear power generation.

The country's coal-fired generation has continues to ease on the year so far in June, with output of 67.2TWh over 1-19 June, down from 72.95TWh a year earlier. Combined coal inventories at Indian power plants stood at 60.46mn t as of 31 May, up from 47.9mn t a year earlier, according to CEA.

Import mix

Imports from Indonesia totalled 10.89mn t in May, up by almost 15pc from a year earlier and higher by over 25pc from April's 8.69mn t, Interocean data show. Indonesia remained the primary supplier of imported coal to India last month, accounting for over 58pc of total thermal coal imports.

Imports from South Africa, a source preferred by coal-consuming industries like sponge iron, rose by over 71pc from a year earlier to 4.26mn t in May, and were also up from 3.2mn t in April.

Thermal coal imports from the US stood at 1.89mn t, up marginally on the year but higher by over 37pc on the month. This high-calorific value coal is preferred by cement producers as a replacement to petroleum coke when coke prices are not competitive enough.

Russia supplied 1.3mn t in May, up by 73pc on the year and higher by 36pc on the month.

By Ajay Modi