Domestic coal production accelerates 3.6% in December, although year-to-date production slips marginally

Domestic coal production in December accelerated about 3.6% on a year-over-year (YoY) basis, also exceeding the target for the month, as monsoon-related disruptions subsided. Although, according to provisional government data for the month, on a financial year (FY)-to-date basis until December-end, coal production slipped marginally as prolonged monsoons in the previous year marred production.

India produced 101.45 million tonnes (MT) of coal in December, 3.6% higher than 97.94 MT it produced in the comparable period a year ago. This is inclusive of production from state-run Coal India and their subsidiaries, Singareni Collieries Company Ltd (SCCL) and from captive mines and others. The production target for the month was 87.06 MT.

Until December in the ongoing financial year, India produced 721.65 MT of coal, 0.64% lower than the comparable period last year.

Overall coal despatch in December also decelerated 2.64% from the comparable period last year. This is primarily led by an approximately 7% decline in offtake to the power sector during the reported period.

Although it’s important to note, power generated from the conventional fossil resources expanded 4.42%. It accounted for about 74% for the power generated during the month. Power demand in December traditionally records an uptick as the country heads into peak winters spurring use of heating appliances.

Analysts attribute this paradigm to sufficiency in coal stocks. According to Niladri N. Bhattacharjee, Partner and Leader for Metals and Mining at Grant Thornton Bharat, coal stocks have increased throughout the system, that is, power plant coal yards and mine pitheads, between March 31st and December 31st last year. “With increased coal production from captive and commercial coal mines, the coal inventory situation in the country is comfortable. As such, it is therefore difficult to correlate thermal power generation with coal-offtake,” he told The Hindu.