Adani Enterprises expects its coal imports to rise about 40 percent this year, the head of its coal trading unit said, preserving its dominance of the coal trade in Asia’s third-largest economy.
The energy-to-real-estate group, headquartered in western Gujarat state, is likely to import 32-35 million tonnes of coal in the 2010/11 year ending in March, up from 25 million the previous year, Vinay Prakash, chief executive officer of the coal trading division, said.
India is expected to import nearly 84 million tonnes of the resource in the current financial year, on top of local production of 572.37 million tonnes, Coal Minister SP Jaiswal said recently.
Adani, which controls Indian power utility Adani Power and its own cape port, Mundra, is able to offer coal at competitive rates owing to its integrated operations.
“Coal demand in India is growing fast, and customers are moving towards index-based pricing methodology,” Prakash said.
Import requirements are expected to reach around 135 million tonnes by 2012, according to analysts’ estimates, as difficulties in mining keep state-run monopoly Coal India from expanding and new mines from coming up.
PRICES
Strong demand from both India and China, which typically buy from Indonesia, South Africa and Australia, has led analysts to expect prices to stay firm above $100 a tonne.
India’s coal pricing is set to move to index-based pricing, while freight rates are likely to move higher, Prakash said.
“India in future will be a more structured market having established themselves as a priority customer.”
A falling trend in iron ore exports will make coal freight rates more expensive as ships bringing in coal cannot find iron ore shipments for the return journey, he added.
As for pricing, he said: “We are importing coal currently from Indonesia & South Africa, which are linked with NEWC and API4 Index. These indexes are tradable on ICE, London exchange.” The company also is reviewing the potential for using recently launched coal option contracts by London Commodity Brokers (LCB), he said.
LCB, a brokerage set up in 2005, pioneered the development of trade into India by providing a bridge between Europe-based sellers and Indian buyers.
“We are hedging our risks to a certain extent. There are no (contracts on) Indian commodity futures exchange that is currently active and liquid,” he added.
The energy-to-real-estate group, headquartered in western Gujarat state, is likely to import 32-35 million tonnes of coal in the 2010/11 year ending in March, up from 25 million the previous year, Vinay Prakash, chief executive officer of the coal trading division, said.
India is expected to import nearly 84 million tonnes of the resource in the current financial year, on top of local production of 572.37 million tonnes, Coal Minister SP Jaiswal said recently.
Adani, which controls Indian power utility Adani Power and its own cape port, Mundra, is able to offer coal at competitive rates owing to its integrated operations.
“Coal demand in India is growing fast, and customers are moving towards index-based pricing methodology,” Prakash said.
Import requirements are expected to reach around 135 million tonnes by 2012, according to analysts’ estimates, as difficulties in mining keep state-run monopoly Coal India from expanding and new mines from coming up.
PRICES
Strong demand from both India and China, which typically buy from Indonesia, South Africa and Australia, has led analysts to expect prices to stay firm above $100 a tonne.
India’s coal pricing is set to move to index-based pricing, while freight rates are likely to move higher, Prakash said.
“India in future will be a more structured market having established themselves as a priority customer.”
A falling trend in iron ore exports will make coal freight rates more expensive as ships bringing in coal cannot find iron ore shipments for the return journey, he added.
As for pricing, he said: “We are importing coal currently from Indonesia & South Africa, which are linked with NEWC and API4 Index. These indexes are tradable on ICE, London exchange.” The company also is reviewing the potential for using recently launched coal option contracts by London Commodity Brokers (LCB), he said.
LCB, a brokerage set up in 2005, pioneered the development of trade into India by providing a bridge between Europe-based sellers and Indian buyers.
“We are hedging our risks to a certain extent. There are no (contracts on) Indian commodity futures exchange that is currently active and liquid,” he added.
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