India's coal imports in September 2025 rebounded from a two-year-and-a-half low in August to hit a historical high for the month in at least eight years, underscoring the country's seasonal demand growth and the reliance on imported coal.

India imported 21.01 million tonnes of coal last month, up 12.82% year on year (YoY) and 22.5% month on month (MoM), snapping a three-month losing streak, according to iEnergy's latest monthly report.

The rebound in coal imports comes despite a generally subdued thermal coal market in Asia, where demand remained soft across major consumers. However, persistent supply constraints and logistical bottlenecks prevented prices from falling significantly.

In India, high inventories and reduced procurement during the holidays led to limited spot buying. Steelmakers, cautious amid festival-induced slowdowns, maintained stable demand for metallurgical coke.

Despite elevated freight rates and ample stockpiles, market sentiment was buoyed by tightening supplies and an expected post-monsoon recovery in domestic demand, fueling coal imports.

India's coal output stood at 68.17 million tonnes in September, down 1% YoY and 2% MoM. Cumulative production from January to September reached 771.47 million tonnes, up 0.7% YoY. Annual output is projected to reach 1.043-1.045 billion tonnes, a 0.5% YoY uptick. The virtually flat growth leaves room for imports to fill the supply gap.

Cumulative coal imports totaled 189 million tonnes during the first three quarters, down 1.76% YoY, shrinking by 1.56 percentage points compared to January-August, iEnergy data showed.

In breakdown by type, the South Asian nation imported 14.18 million tonnes of non-coking coal in September, up 6.89% YoY and 39.53% MoM, while anthracite import climbed 32.35% YoY but slumped 59.19% MoM to 87,700 tonnes. The increase in thermal coal purchases was driven by post-monsoon and pre-winter restocking, as well as improved price competitiveness in the cement sector.

India's electricity generation continued to rise YoY in September, though the pace moderated due to weakened industrial activity and rainfall-induced lower cooling demand. In the month, power demand reached 145.91 TWh, up 3.21% YoY, down from August's 4% growth.

Peak power demand was 229.2 GW, slightly below last year's 230.6 GW and well under the government's forecast of 277 GW, according to the Central Electricity Authority (CEA), due to intermittent rainfall dampening cooling needs.

The cement sector remained stable. The government cut the Goods and Services Tax (GST) on cement from 28% to 18%. The cement price drop is expected to stimulate long-term consumption. With improving weather and accelerated infrastructure spending, cement prices may see a strong rebound in the second half of the fiscal year.

Imports of coking coal reached 4.82 million tonnes during the month, up 32.08% YoY and 3.19% MoM. Imports of PCI coal totaled 1.93 million tonnes, up 17.12% YoY yet down 8.53% MoM.

India's steel industry, experiencing rapid growth, saw robust sales among major producers between July and September. JSW Steel reported a 92% capacity utilization rate during September and anticipated 8-9% growth in domestic steel demand this fiscal year.

Still, the sector faces challenges, notably shortages of met coke and an oversupply of steel. In response, the government imposed restrictions on met coke imports to support local producers. These curbs have exacerbated supply shortages, prompting calls from steelmakers for a relaxation of import rules.

India imported 208,600 tonnes of met coke in September, falling 40.69% YoY and 7.49% MoM, while petroleum coke imports grew 55.52% YoY but dropped 31.22% MoM to 1.21 million tonnes.

Indian traders imported most coal in September, reaching 9.19 million tonnes, surging 69.09% YoY and 83.55% MoM, as per iEnergy data. The steel and sponge iron industries received 8.13 million tonnes, a 20.39% YoY increase and a 6.63% MoM rise.

In the month, India's power sector imported 2.26 million tonnes of coal, down 56.11% YoY and 23.61% MoM; the cement sector imported 943,700 tonnes, up 25.64% YoY and 50.71% MoM; and the chemical industry received 205,100 tonnes, down 21.34% YoY and 48.24% MoM.

By origin, Indonesia remained India's largest coal supplier in September, shipping 9.01 million tonnes, up 2.51% YoY and 26.11% MoM. Australian coal arrivals gained 32.91% YoY and 20.42% MoM to 3.91 million tonnes.

Imports from South Africa rose 12.3% YoY and soared 143.74% MoM to 2.77 million tonnes, and Russian coal imports rose 25.07% YoY but dropped 16.66% MoM to 2.61 million tonnes. Coal intakes from the U.S. ascended 0.44% YoY and 11.57% MoM to 1.48 million tonnes.

Looking ahead, India's coal market is expected to remain active, though the pace of growth may decelerate. Short-term thermal coal demand will likely be supported by the end of the festival season and the onset of winter peak consumption. The outlook for coking coal, however, hinges on steel industry margins and the government's stance on coke import restrictions.

Global coal prices, freight costs, and the trajectory of domestic coal output will also be critical for India's import appetite in the coming months.