New Delhi: Large coal-importing nations, including India, will look to ramp up the output of domestic coal to strengthen energy security and lessen dependence on the import of fossil fuels, Moody's Investors Service said on Tuesday.

The government has recently mandated Coal India to import coal as an emergency measure to avoid a shortage of coal for the country's power utilities and build up buffer stock.

"Large coal-importing countries such as China and India will also seek to ramp up domestic coal production to enhance energy security and reduce reliance on coal imports. Chinese coal production surged 15 percent in March 2022," Moody's Investors Service said.

Coal India Ltd targets to increase production by around 12 per cent in the current year, the agency said.

The state-owned firm accounts for over 80 per cent of India's coal output.

Moody's Investors Service further said that metallurgical and thermal coal prices will remain high, but below recent peaks.

However, the supply constraints were easing, it added.

Prices for copper, zinc, nickel and aluminium reflect low inventories and supply risk related to Russia. Supply, which was tight even before disruptions from the military conflict, will remain constrained, it noted.

"Steel and raw material prices have begun to soften as panic buying recedes, supply-chain issues reduce global demand, COVID-related lockdowns reduce consumption in China, and inflationary cost pressures and higher interest rates weigh on sentiment and economic growth," the agency added.

(With PTI inputs)

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