India coal short-term outlook January 2024

India’s electricity demand increased in Q4 after witnessing a sudden spike in October 2023. Majority of the demand was met by coal-fired generation as hydro and renewable output declined. We expect power demand to be robust in Q1 2024 as India is expected to witness a harsher winter than usual. India’s coal output grew in Q4 2023, growing over 13% over a year. This was primarily due to increase in production post monsoon. India’s thermal coal imports grew by 84% in October 2023, over a year, after recording a year-over-year decline for the past 4 consecutive months. India’s hot metal production increased by 3% m-o-m in October followed by a decline of 5% m-o-m in November due to a slowdown in construction activity due to elections in five states of India. On a y-o-y basis, hot metal production grew by 5% during October-November. Looking ahead to Q1 2024, we expect hot metal production to pick up due to higher infrastructure spending ahead of general elections in May 2024.