Coal India's supplies to utilities continue to fall

Supplies from state-controlled producer Coal India (CIL) to the country's coal-fired power plants fell for the seventh straight month in November.

CIL, India's dominant producer, supplied 38.8mn t to utilities in November, down by 10.1pc from a year earlier, according to a data compiled by the country's coal ministry. But the pace of the fall was slower than the 19.4pc fall to 33.8mn t in October.

CIL's supplies to utilities fell by 8.9pc to 291.4mn t during April-November — the first eight months of India's 2019-20 fiscal year.

Supplies from smaller state-controlled coal firm Singareni Colleries (SCCL) to the power sector dropped by 5.6pc from a year earlier to 4.6mn t in November. This compared with a 12.1pc fall to 4.2mn t in October. SCCL's April-November output fell by 1.7pc to 34.4mn t.

The data highlights continued challenges for India's power sector, given more than half of the country's electricity generation capacity is coal based. Dozens of power stations are running with coal stocks of up to six days, hurting their power generation capability.

Total coal burn in November eased by 8.65TWh or 10.6pc on the previous year to 72.94TWh. Weaker coal-fired electricity generation last month extended a trend of annual falls posted in each month since August.

Indian imports are on course to rise this year, with CIL reporting falling production for the last five months until November. CIL, which meets more than 80pc of India's coal needs, posted a 7.8pc drop during April-November to 330.38mn t. The company is targeting [increased output from December]([https://direct.argusmedia.com/newsandanalysis/article/2032914).

Seaborne thermal coal receipts across the country were 13.3mn t in November, up from 13.01mn t a year earlier, provisional data from e-commerce firm Mjunction show.

Imports are not only vital to partly help bridge the domestic demand and supply gap, but are crucial for the country's 13 imported coal-fired plants that roughly comprise 9pc of India's coal-fired electricity generating capacity.

The country aims to boost domestic output by auctioning coal blocks for commercial mining along with speeding up clearances and approval process, although the proposed reforms are facing delays.

By Saurabh Chturvedi

source: Argus Media