India is on way to boost self-sufficiency in coal: Fitch.

India is on its way to boost self-sufficiency in coal with a 5.1 percent year-on-year output growth in the first half of 2016, Fitch Ratings has said.

"The higher prices of seaborne coal prompted power plants to increase the use of domestic coal, causing 1H16 imports to drop 13.1 percent y-o-y," the ratings agency said.

"The doubling of the volume-based clean-energy tax in February 2016 increased demand for high-caloric-value coal, as evident from increased imports from South Africa and Australia at the expense of low-grade Indonesian coal in 5M16," it added.

"Fitch Ratings believes the strong gains in Asia thermal-coal prices in recent months with the benchmark Newcastle 6,000kcal/kg coal price having appreciated 32 percent in 8M16 and averaged USD 54.2/metric tonne are unlikely to be sustained as they were driven more by production regulations than demand fundamentals," it said.

Demand continues to be weak, with China coal consumption having fallen 4.6 percent y-o-y in the first half of 2016 and India imports down, it added.

Source : moneycontrol.com​