India's Coal Demand Surge as Plants Run on Bare Stocks

India's coal-fired power plants are facing critically low levels of coal inventory, with nearly 40% of operational plants running on less than three days' worth of stock. The Central Electricity Authority reported that as of this weekend, 74 coal-fired power plants had fewer than three days' worth of coal stocks, up from 60 in the previous week. Despite the low stock levels, India does not face any critical supply issues, as recent domestic transportation issues have depleted inventory at coal power plants in several states due to rising power demand.

The Ministry of Coal stated that domestic coal companies are ramping up supply to the coal-fired power plants, with coal stocks falling below the critically low level of 25% amid strong El Niño conditions and monsoon-related disruptions. Analysts say that the key constraint has been in domestic transportation in recent weeks.

According to the International Energy Agency (IEA), India's total coal demand is expected to rise by 4.2% this year, reaching 1.353 billion tons. This reversal comes after last year's temporary slight drop in demand. The IEA attributed the increase to higher power demand and oil and gas disruptions at the Strait of Hormuz.