Indian power plant coal stockpiles have set a new record. Power plant coal stockpiles currently total approximately 23.3 million tons. This is 1.3 million tons (6%) more than was stockpiled at the end of July and a year-on-year increase of 13.8 million tons (145%). In comparison, last year saw Indian power plant coal stockpiles range between only 7 and 15 million tons, and India experienced unprecedented electricity shortages.

The second half of this year, however, has seen power plant coal stockpiles remain at at least 20.9 million tons. According to government officials in India, 23 million tons of coal is enough for 19 days of production. Not surprisingly, Indian demand for imported thermal coal cargoes has remained under a bit of pressure during the last few weeks due to the record amount of coal that is stockpiled at India's power plants.

A look back at historical data shows that Indian power plant coal stockpiles traditionally start declining in March or April of every year, and normally begin increasing again starting in November. This has not been the case this year, as stockpiles have been further restocked this summer. During the upcoming weeks, Indian demand for imported thermal coal cargoes could remain under a degree of pressure.

However, it is certainly possible that Indian officials will further re-stock power plant coal stockpiles in order to make sure that extreme electricity shortages that occurred last year will not occur again this year. Looking towards the longer-term, it is likely that India will hold a larger amount of coal that has been stockpiled in the past. In addition, Indian electricity production is poised to continue to grow and Indian coal imports are set to continue to increase.