Amid high inventories at pitheads and power plants, Coal India on Monday reported a 10.6 per cent drop in production in the first two months of the ongoing fiscal year despite a surge in power demand.
Coal production during April and May was at 112.2 million tonnes compared with 125.6 million tonnes in the same period the previous year. In the month of May, coal production was at 56.1 million tonnes (mt) compared with 63.5 mt in the year-ago period.
Offtake during the first two months of the fiscal year was at 130.9 mt compared with 129.8 mt, up 0.9 per cent year-on-year, as the public sector miner prioritised sales and inventory liquidation. For May, offtake was at 66.7 mt, up 2.2 per cent from 65.2 mt last year.
Coal stock, which was at around 130 mt at the start of the financial year, has come down to around 113.5 mt as of May 24 and stocks at the domestic coal-based thermal power plants were at 47.6 mt as of May 23. On May 26, Coal India had estimated that with additional coal available in goods sheds, washeries, ports, and rakes on transit, around 168 mt of coal is available in the system to cater to the surge in power demand during the summer season.
“Production lagged dispatches due to inventory liquidation following elevated stock build-up at the company level, while dispatch growth remained muted amid high inventory levels at power plants,” said Sidhharth Gadekar, analyst at Equirus Securities.