Page 221 - ΝΑΥΤΙΚΑ ΧΡΟΝΙΚΑ - ΟΚΤΩΒΡΙΟΣ 2024

ensure supplies and avoid blackouts. This ratio
was set at 4% for the period between 27 June
and 15 October 2024, down from 6% previously.
“Dry bulk carriers in the Capesize and Panamax
segments benefited the most from an increase
in coal cargoes, as we saw a shift towards larger
ships transporting coal to India. So far in 2024,
cargoes aboard Supramax ships stagnated and
their cargo share of coal shipments to India fell to
21% from 23% in 2023”, says Gouveia.
Indonesia is the origin of 45% of India’s seaborne
coal imports, nearly all of which is thermal coal.
Supramax ships are sometimes preferred for
these routes due to limited crane availability or
draft restrictions in smaller ports.
Although shipments have surged so far in 2024,
they may grow at a slower rate over the rest of
the year. The monsoon rains in India ramped up
in August after a slow start, leading to a 26% y/y
increase in water levels in reservoirs. This should
allow hydropower generation to recover, reducing
coal demand.
Coal inventories in power plants are also at
healthy levels, with only 22 power plants at critical
levels. It is still unknown whether the government
will ease or eliminate coal import mandates in
October, but should they do so, imports could
grow at a slower rate.
“Unlike in advanced economies where demand
The surge in new production starkly contrasts has peaked, or in China where a large investment
with China’s dual carbon neutrality targets. The in renewables is reducing demand, India’s coal
potential for increased methane emissions from demand is still expected to rise in the medium
these new mines, coupled with the challenge of term. However, import demand growth will be
abandoned coal mine methane as China accel- limited by the country’s ambitious targets to
erates the closure of small-scale and inefficient increase domestic mining by an average of 7%
operations, poses significant risks to China’s cli- per year until the end of the decade. Should
mate goals. India reach its target, cargo growth would slow,
although a reduction in volumes from current
Coal shipments to India jump 10%, but growth levels is unlikely”, says Gouveia.
may slow down
Between January and August 2024, coal ship- IRON ORE-STEEL
ments to India rose 10% y/y, outpacing an 8%
y/y increase in domestic coal mining. Thermal Goldman Sachs' estimate for the iron ore price
coal shipments were a key driver, supported by Goldman Sachs has downgraded its estimate for
strong electricity demand and coal import man- the iron ore price in the fourth quarter of 2024.
dates. “During the rest of 2024, growth may slow According to Goldman Sachs, the iron ore price will
as demand cools”, says Filipe Gouveia, Shipping be set at $85/tonne from $100/tonne, the result of
Analyst at BIMCO. oversupply versus weakened demand from China.
India, the world’s second-largest coal importer, Analysts at the banking giant warn that without
saw its electricity generation rise 9% y/y between supply cuts, the market balance is in doubt.
January and July 2024. Power generation from While Chinese iron ore consumption has shown
coal rose 13% y/y, compensating for a 6% y/y signs of stabilising, overall demand remains slug-
decrease in hydropower generation due to low gish. The weak macroeconomic outlook for China,
water levels. including a downgraded forecast for GDP growth
Since 2022, all power plants in India have been to 4.7% for 2024, signals that domestic demand
under a mandate to blend a minimum ratio of will not provide sufficient support for a recovery
imported coal in their electricity generation to in iron ore prices.

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