“We certainly feel better about the prospects for coal,” Whitehaven Coal CEO Paul Flynn told The Wall Street Journal.

“It’s been a very, very difficult environment, but I see signs that the oversupply situation is tightening up now, which is good.”

Major Australian thermal coal exporter Glencore is also expecting demand for the commodity to eclipse supply from next year.

“Analysts expect a rise in Indian thermal coal imports — after lower-than-usual monsoon rains led to weaker hydropower generation — to send prices higher,” the newspaper reported.

“Citi analyst Ivan Szpakowski also forecasts a lift in Chinese industrial activity toward the end of the year, which he thinks will drive up demand.

“Buyers in China and elsewhere are also looking to switch to higher-quality coal that generates lower emissions and meets environmental targets. This is a plus for Australia with its abundant reserves of high grade coal.”

Flynn reportedly believes that rising Indian demand could be a positive catalyst for thermal coal prices.

India’s Supreme Court recently made a controversial decision to rule that all coal mining licences in the country awarded between 1993 and 2010 were illegal.

This has led to local supply disruption and on Friday Reuters reported that half of India’s coal-fired power stations had less than a week’s supply on hand.

This is the lowest level since an estimated 620 million people were impacted by the Indian blackouts in mid-2012.

“Central Electricity Authority (CEA) power figures for the situation on Tuesday, accessed by Reuters on Friday, showed that 50 of India's 100 thermal power stations had enough coal to last less than seven days,” the newswire reported.

“Taken as a whole, India's thermal power generators have six days of supplies – far short of the 15-30 days set as an operating norm by the CEA.”

The shortage has also been boosted by a surge in national air conditioner use.

Adani Group’s Mundra power plant in India’s Gujarat Province reportedly cut its output by 2300 megawatts due to a shortage of coal last week.

“As a result of the cut, India's total generation capacity on Thursday was about 9,110MW less than its potential demand at peak periods of the day,”Reuters reported.

“That gap was nearly twice as wide as at the beginning of the week, according to Power Grid data.”