Nearly 40% of India's Coal Power Plants Hit Critical Inventory Lows, Government Data Show
India's push to substitute domestic coal for imports has left plant stocks dangerously thin, exposing utilities to a potential forced return to a costly seaborne market.
Nearly 40% of India's operational coal-fired power plants are running on critically low stock levels, Reuters reported on Monday (2026-09-21), citing government data. The data arrives as Indian utilities have spent much of 2026 pushing to replace imported coal with domestic supply. Newcastle physical coal traded at $137.05 per tonne on Monday (2026-09-21) — a price Indian buyers may soon have little choice but to pay.4,5
The inventory stress undercuts the import substitution push. Since the start of 2026, India has raised domestic coal's share to 50% at many plants designed to run on imported fuel, industry and government officials told Reuters on Wednesday (2026-06-24). Some facilities have pushed that ratio to 70%. In volume terms, 5.7 gigawatts of capacity at the 18.7-gigawatt fleet of import-designated plants has been switched over, with another 4.3 gigawatts in progress.4
The import numbers reflect the effort. Between January and May 2026, thermal coal imports into India slumped to a four-year low, with purchases falling 12% from a year earlier, according to commodities consultancy BigMint.4
Coal-fired power generation is not falling. Coal remains roughly 60% of India's total power output, and capacity installations continue to rise. India is the world's second-biggest coal importer and user after China. Running plant stocks down to critical levels while cutting import flows was always a narrow path; the government data published Monday (2026-09-21) suggest it has narrowed further.4
Asia as a whole is still buying seaborne coal. Commodity analysts Kpler estimated July 2026 thermal coal imports across the region at 73.16 million metric tons, up from 70.31 million in June and above the 71.04 million shipped in July 2025. Asia accounts for roughly 90% of global seaborne thermal coal trade. If India returns to the import market in volume, the regional total shifts higher.5
China's picture offers a different dynamic. China's coal imports fell 9.6% in 2025 to 490 million tonnes, driven by higher domestic production and a rare decline in thermal power generation, Bloomberg reported, citing official import data. Generation has since recovered: official data show Chinese thermal power output rose 0.5% in June 2026 and 2.9% across the first six months of 2026, even as import flows stayed low.3,5
Chinese domestic production has started to edge back. Output slipped 1% in April 2026 to 385.63 million tonnes, Reuters reported, citing official statistics, a retreat from the all-time high reached in March 2026. Over the first four months of 2026, production dipped 0.1% against the equivalent 2025 period, even as generation climbed. Analysts attributed the import slump to weak demand, high port inventories, and narrowing margins that made local coal cheaper than seaborne alternatives.1,2
That price gap has been the persistent force behind China's import restraint. With port inventories ample and domestic mines running near record rates, Chinese buyers have had little reason to pay seaborne prices. Should generation growth continue pressing on domestic supply through the second half of 2026, that calculus could shift, providing an additional bid for Newcastle coal at a moment when Indian demand may already be recovering.2
For India, the more immediate pressure is operational. Running nearly 40% of plants at critically low inventory during a period of high power demand leaves little room for error in domestic supply logistics. Any disruption to Coal India's dispatch schedules, or a sharper-than-expected surge in power demand, could accelerate the return to seaborne procurement.4
JKM Asian LNG spot was at $27.51 per MMBtu on Monday (2026-09-21), in a market analysts have linked to the Iran conflict disrupting LNG flows from Qatar, which supplies roughly 20% of global LNG. ICE Brent crude front-month was also at $100.29 per barrel on Monday (2026-09-21). Newcastle physical coal at $137.05 per tonne gives Indian utilities a cost argument against reopening imports, but with critically low inventories near 40% of plants, the next government stock data release may show how little time remains before that argument gives way.5