Indian traders participating in the tender said that Maharashtra State Electricity Board is seeking 3.35 million tonnes of imported coal from any origin for five power plants.

Traders said that the re emergence of India's state utilities as coal importers, buying multi origin coal against a basket of indices is likely to become a key global coal price driver this year. The offer deadline is May 14 and awards are expected in June.

One major Indian coal traders said that "MSEB is in the market for a large tonnage, National Thermal Power Corp. will be tendering for at least 14 million tonnes soon and there are several others ready to come out now including Coal India.”

India's coal imports will be at least 60 million tonnes in 2010, but could easily reach 80 million tonnes if all the state plants do, as expected, increase the tonnage they seek.

Traders said that Indian state utilities have widened the specifications of coal they will accept to include fuel from South Africa, Australia and elsewhere.”

Another Indian trader who supplies to state utilities said that "They will be willing to consider any coal, all dependent upon the price, so you will see more South African coming into the state plants, I'm sure of that.”

India's consumption of South African coal has rocketed from almost nothing in 2004 to over 30 million tonnes projected for 2010 and has been one of the most significant factors supporting South African FOB prices at over USD 90.00 a tonne currently, from below USD 70.00 in December. Until very recently, Indian state power plants' terms precluded all but Indonesian low grade coal from being offered but the change will mean state buying has more impact on international prices.

(Sourced from Reuters)