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CIL pit head stocks dip to 5 year low of 31 million tonnes

Coal News - Published on Tue, 06 Nov 2018

Image Source: Coal Power Steel
ET reported that combined stocks at mine pit heads of Coal India and power plants have dwindled to a 5 year low of about 31 million tonnes, just enough to supply thermal power plants for 18 days, because the company sold more than it produced under pressure to meet demand. At power plants, fuel stocks are down to six days requirement, much below the norm of the Central Electricity Authority, which stipulates enough coal to generate electricity for at least 21days. Coal stocks are at critical levels at 28 power plants, meaning they will last a week or less. A senior Coal India executive said coal stocks at mines have touched a five-year low of 21 million tonnes this month from about 55 million tonnes towards the beginning of the fiscal.

Between April and October it produced 306.24 million tonnes of coal and sold 340.81million, eating into pit head stocks by 34.57 million tonnes in an effort to meet increased demand from the thermal power segment. Coal India falls back on pit head stocks when production growth in not on a par with demand. With stocks at its end dwindling, it may now become difficult for the company to jack up supplies to the power sector.

Coal Minister Mr Piyush Goyal said in Kolkata that Coal India’s growth rate was around 10%, but it could fall, which poses a huge challenge as demand is rapidly rising. The company claims it supplied 271.88 million tonnes of coal to the power sector during April-October 2018 thus managing 8.9% growth over the previous corresponding period. This, in absolute terms, was 22.2 million tonnes which came primarily from pit head stocks.

Mr Jayanta Roy, senior vice-president, and group head-corporate sector ratings at ICRA, said that “Domestic coal supply remains significantly short of the domestic demand due to a strong recovery in power demand, lower hydropower generation in the current fiscal as well as a healthy growth in production levels from non-regulated consuming sectors like cement, aluminium.”

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Posted By : Rabi Wangkhem on Tue, 06 Nov 2018
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