Apprise About Coal Sector

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Domestic coal production continues to be lower on m-o-m basis furthermore as the yo-y basis for the fourth straight month terminated by July 2020. High inventory and lower off-take of coal by end-user industries like power, steel and cement have wedged demand and consequently the production of coal. Apprise About Coal Sector

Off-take of coal improved consecutively in July 2020 because of gradual relaxations in COVID lockdowns measures however shrunk by 8.3% compared to the year-ago month. Consumption of coal by end-user industries additionally improved marginally from 54.2 million tons (mt) in the month of May 2020 to 56.7 in Gregorian calendar month 2020. However, on a yo-y basis consumption of coal in a Gregorian calendar month was lower by nineteen.8%.

Thus, though’ off-take and consumption of coal have shown marginal improvement on the m-o-m basis because of gradual relaxations in COVID lockdown measures, production of coal continues to fall even consecutive because of high stockpiles and slower than anticipated recommencement in business activities.

Domestic coal production stood at 45.5 mt in the month of July 2020, down by 5.5% compared to July 2019 and 3.8% compared to the month of June 2020. Coal India Ltd (CIL) (which accounts for 80% of domestic coal output) announced provisionary figures for August 2020 that show 7% y-o-y growth in coal production throughout the month. However, this was chiefly due to lower coal production in August 2019 (-10.4%) due to serious rainfall and law and order issues. CIL’s coal production fell by 0.5% in July 2020 in comparison to June 2020.

 CIL’s coal dispatch to various consuming sectors remained unchanged in August 2020 compared to July 2020 though compared to the year-ago month it absolutely was higher by 9.3%.

Total coal dispatches improved marginally in June and July 2020 on an m-o-m basis because of phased relaxations in COVID lockdown measures, however, remained 25% lower from pre-COVID levels and 8.3% lower compared to July 2019. Power sector consumes almost 80% of total coal manufactured. Throughout Apr-July FY21, seventy-eight of total coal dispatches were to the ability sector. Dispatch of coal to the power sector fell by nineteen.7% throughout Apr-July FY21 compared to the corresponding amount of FY20. Dispatch of coal to the non-power sector witnessed even trickster contraction. Throughout the 5-month amount dispatch of coal to steel, cement and sponge iron sector shrunken by eighteen, 46.1% and 28.8%, severally.

Source: CEA

There has been a pickup in domestic demand and generation of electricity from the lows of April 2020 (86 billion units) with the easing of lockdowns and also the subsequent gradual commencement of economic activity in varied regions. Coal-based thermal power generation, that has the dominant share of 64% in total domestic electricity generation witnessed growth on a sequential basis.

Though there has been associate degree improvement in electricity demand there’s still a large inventory of coal lying with each the coal mining firms in addition because the power plants that have resulted in slower off-take of coal The augmented coal production within the previous couple of months of FY20 followed by slower than anticipated off-take of coal by end-user industries because of the eruption of Coronavirus and also the subsequent imprisonment measures junction rectifier to surge in coal inventories at power plants and with coal miners.

Coal inventory at thermal power stations has up to sixty-seven to square at thirty 7.7 mt as on thirty-one July 2020 compared to the year-ago month. this can be spare to last the ability plants for twenty-one days. Besides, coal stocks with business coal miners stood at seventy 3.4 mt as on one August 2020 compared to 38.8% mt as on 1st August 2019.

Lower demand and ample accessibility of coal within the domestic market junction rectifier to a pointy fall in import of coal throughout Apr-July 2020. Import of coking coal fell by 39.9% to 10.7 mt throughout Apr-July FY21 vs. Apr-July FY20. Import of non-coking coal fell by 35.7% to 38.8 mt throughout a similar amount.

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