Barely any change in production or dispatch in June 2019 compared to a year earlier. It’s worth reminding ourselves that ambitions were dramatically higher until recently. Just four years ago CIL, with the endorsement of the Coal Ministry, stated in their Roadmap document that “Coal India Limited have now a single-pointed focus (of) attaining the 1 Billion tonne (target) by 2019-20“. With 2019-20 Q1 now complete, a figure closer to half that amount – 570 million tons – looks closer to the mark. How quickly expectations (and plans) can change.
If there’s any trend that could portend persisting demand for coal imports, it’s shown below in the continuing push to supply the power sector at the expense of other users (e.g. aluminium smelters, sponge-iron producers, cement manufacturers), who are sourcing coal elsewhere.
Pithead coal stocks remain over 10 MT ahead of last year’s levels, and have survived the power demand spike in May and June without falling substantially.
Media reports of critically low stocks are thin on the ground so far in 2019-20. Might they re-emerge in Q3 like last year?
Because more of the coal is already at the power plants, the fact that overall stocks are only a few MT above last year’s level may not have the same impact as a year ago, by the time we reach the yearly minimum that has normally occurred each October.
May and June have seen a return to growth in coal-burning for power, but the recent slow-down means that growth now lags the longer-term trend by a fair margin.
Be the first to comment