Wed Mar 10, 2010 11:34pm IST
By Jackie Cowhig
MUMBAI (Reuters) - Coal producers and traders from around the world gathered in Mumbai this week eager to gauge India's hunger for coal, and were overwhelmed by end-users and traders wanting to buy cargoes and book ships.
India's growing need for imports has been clear for a few years but what is emerging now is an appetite to follow China's lead and try distant coal from the U.S., Colombia and Russia which creates a host of new opportunities for trade.
India's 81 million tonne coal shortfall this year, to be filled by imports and soaring exports from South Africa, paint a clear picture of a boom in progress.
But the keenness to buy took newcomers to the Indian market such as Colombian exporters and even old hands by surprise.
"There's been such a buzz to this conference - everybody you meet wants to buy something or sell something," said Robert Elphick of ship brokers Thurlstone, on the sidelines of the Coaltrans conference in Mumbai.
Thermal coal is India's biggest source of power generation, followed by hydro, renewables and nuclear. Almost all the new power plants it plans are coal-fired.
South African coal producers have been selling to India for many years but India is looking further for bargains.
Companies attending included Colombia's Cerrejon, exporters, Vale, Xstrata, Rio Tinto, BHP Billiton, Anglo Coal and SUEK and Mechel from Russia.
Colombia shipped several million tonnes of coal to China in the first quarter, prompting sellers to look at India as another Asia option.
"Even if you dismiss 50 percent of the interest as unlikely to materialise, what's left is really strong, it's amazing," said a Colombian producer who declined to be identified.
NEW ORIGINS
A common theme in discussions with end-users in the cement, sponge iron and merchant power plant sectors was the desire to import high energy-content coal from the Americas, as China has.
"If we are to ship long-distance it makes sense to buy the highest energy content coal we can," said one of India's largest end-users, who declined to be identified due to company policy.
"If you know anybody with high-sulphur U.S. coal at competitive prices we would be keen to talk to them," he added.
Sellers of Colombian coal attending the conference said prices need to rise a little before it became profitable.
"It's good to know that India is a market into which we can sell our coal even if it's not our first choice," the Colombian supplier said.
"American and Colombian coal will start moving to India. It will happen this year though, I'm sure," a shipping source said.
Construction-related industries such as steel and cement making plus power generation are all growing strongly in India and needing more coal, sponge iron and cement makers said.
India's cement output was 178 million tonnes last year, rising to 225 million this year and set to hit 300 million in five years time, cement makers said.
State utilities alone will need 35 million tonnes of imported coal in fiscal year 2010/2011.
The nascent merchant power sector - small to medium-sized independent power plants who sell spot power to end users or regional electricity grids - are also urgently seeking imports.
Merchant power plants are starting to spring up to help bridge India's power shortfall in industrialised locations.
Some are being built by established coal suppliers such as Emirates-based Coal & Oil, others by industrial giants.
For a graphic on India's growing appetite for coal please click on: here CLIMP0210.gif.
(Editing by Sue Thomas)
Source: http://in.reuters.com/article/businessNews/idINIndia-46809020100310
By Jackie Cowhig
MUMBAI (Reuters) - Coal producers and traders from around the world gathered in Mumbai this week eager to gauge India's hunger for coal, and were overwhelmed by end-users and traders wanting to buy cargoes and book ships.
India's growing need for imports has been clear for a few years but what is emerging now is an appetite to follow China's lead and try distant coal from the U.S., Colombia and Russia which creates a host of new opportunities for trade.
India's 81 million tonne coal shortfall this year, to be filled by imports and soaring exports from South Africa, paint a clear picture of a boom in progress.
But the keenness to buy took newcomers to the Indian market such as Colombian exporters and even old hands by surprise.
"There's been such a buzz to this conference - everybody you meet wants to buy something or sell something," said Robert Elphick of ship brokers Thurlstone, on the sidelines of the Coaltrans conference in Mumbai.
Thermal coal is India's biggest source of power generation, followed by hydro, renewables and nuclear. Almost all the new power plants it plans are coal-fired.
South African coal producers have been selling to India for many years but India is looking further for bargains.
Companies attending included Colombia's Cerrejon, exporters, Vale, Xstrata, Rio Tinto, BHP Billiton, Anglo Coal and SUEK and Mechel from Russia.
Colombia shipped several million tonnes of coal to China in the first quarter, prompting sellers to look at India as another Asia option.
"Even if you dismiss 50 percent of the interest as unlikely to materialise, what's left is really strong, it's amazing," said a Colombian producer who declined to be identified.
NEW ORIGINS
A common theme in discussions with end-users in the cement, sponge iron and merchant power plant sectors was the desire to import high energy-content coal from the Americas, as China has.
"If we are to ship long-distance it makes sense to buy the highest energy content coal we can," said one of India's largest end-users, who declined to be identified due to company policy.
"If you know anybody with high-sulphur U.S. coal at competitive prices we would be keen to talk to them," he added.
Sellers of Colombian coal attending the conference said prices need to rise a little before it became profitable.
"It's good to know that India is a market into which we can sell our coal even if it's not our first choice," the Colombian supplier said.
"American and Colombian coal will start moving to India. It will happen this year though, I'm sure," a shipping source said.
Construction-related industries such as steel and cement making plus power generation are all growing strongly in India and needing more coal, sponge iron and cement makers said.
India's cement output was 178 million tonnes last year, rising to 225 million this year and set to hit 300 million in five years time, cement makers said.
State utilities alone will need 35 million tonnes of imported coal in fiscal year 2010/2011.
The nascent merchant power sector - small to medium-sized independent power plants who sell spot power to end users or regional electricity grids - are also urgently seeking imports.
Merchant power plants are starting to spring up to help bridge India's power shortfall in industrialised locations.
Some are being built by established coal suppliers such as Emirates-based Coal & Oil, others by industrial giants.
For a graphic on India's growing appetite for coal please click on: here CLIMP0210.gif.
(Editing by Sue Thomas)
Source: http://in.reuters.com/article/businessNews/idINIndia-46809020100310
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