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Singapore — Seaborne thermal coal traders were unfazed and stressed the importance of imported material in India's energy mix even as the Indian government urged end-users to keep seaborne cargoes at bay and consume domestic stockpiles amid the coronavirus pandemic.

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India's Coal Minister Pralhad Joshi had written to Indian states asking for refrain from importing coal, and relying instead on domestic material from Coal India Limited.

Several Indian states have opted to extend the lockdown until at least the end of the month in a bid to stop the spread of the pandemic.

Last week, a total of 40 thermal power plants in India, with a combined capacity of at least 30 GW, reportedly stopped lifting coal as demand fell sharply due to the nationwide lockdown, Platts reported previously.

A north India-based trader was unperturbed as he asked to consider the practicality of keeping seaborne imports on the back burner.

Imported coal demand is unlikely to dip moving forward, he said.

"Stockpiles at Coal India have accumulated amid the shutdown. Once the coronavirus is eradicated and power consumption is regularized, Coal India would experience a shortfall again, which power demand in the country will only be covered by imported coal," he said.

An Indonesia-based producer reckoned that it is unfeasible to stop all imported coal from entering India.

"Indian domestic coal are usually low in calorific value and high in ash content, they can't be used without blending with imported coal from Indonesia," he said.

"At this juncture, it makes no difference whether there's news from India to stop the import of the dry fuel, Kalimantan miners should start to consider shutting down operations amid bearish coal prices," he added.

The north India-based trader, however, said that many government owned power plants have been designed for low-cv coal for domestic use only, so blending will not be required.

Another Indonesia-based producer surmised that Indian domestic coal were reportedly sufficient last year and India intended to keep import volumes thin.

However, India still relied on imported coal given the limitations of domestic production and transport, he said.

Thus, it was difficult to comment on a similar approach here, he added.

Platts assessed FOB Kalimantan 4,200 kcal/kg GAR – or 3,800 kcal/kg NAR – coal at $29.90/mt last Thursday, dipping below the $30/mt FOB mark for the first time in 16 months amid lackluster seaborne demand from China, India and Southeast Asia.

Similarly, the delivered price of seaborne 4,200 kcal/kg GAR coal into India was assessed at $36.25/mt CFR India East last Thursday April 9, down 14.1% since the beginning of the year.

"We agree that, in particular coastal utilities, do not have the access to domestic coal, and the plants are designed for imported coal. There are significant rail restrictions amid congestion and wagon availability, which is limiting the flow of coal to domestic power plants in a number of states. So while it could be feasible to switch to domestic coal, in our opinion it is unlikely," S&P Global Platts Analytics' lead coal analyst Matthew Boyle said.

Coal India Limited could not be immediately reached for comment on the matter.