- April 2020 witnessed a sharp year on year contraction in the arrival of all solid fuels and met coals, from all origins. Both January and February continued seeing growth, after ending 2019 on a strong note. But COVID-19 broke the momentum during second half of March 2020.
- This is not surprising as the Covid 19 pandemic rages across the world, it led to the shutdown of India from March 25th and the gradual reopening only towards the Mid of May 2020.
- Even now as we have past the mid way mark in May, India has barely opened up and consumer confidence and spending remains at an all time low.
- The entire economy was standstill in April and this is reflected in the Manufacturing PMI number which plummeted to 27 for the month of April. The services PMI number fared even poorer with the number coming in at 7.
- While the economy is gradually opening up and cement plants have started production again, the inventory of coal on the ground has now choked the ports. And will lead to a sharper contraction in arrivals for the month of May.
- Coal India Ltd has also had a forgettable start to the new fiscal year with dispatches falling by 25.4% year-on-year in April following a drop in demand for thermal power because of the total shutdown. At a mere 39.1 million tons, this is the lowest April volume since FY13,
- Production growth has also remained muted at a time when demand usually rises in the summer months. The company produced just about 40.4 million tons of coal, an 11% year-on- year decline. The monsoon could further impact coal production because of a seasonal decline.
- With almost no economic activity taking place in first 20 days of April due to lockdown, and very little operations after that, power demand declined sharply by 24 per cent in the month, Crisil Research said.
- At the end of April 2020, Coal India had an estimated 76 million MT of inventory at the pit heads and Indian power plants had 51 million tons of inventory at the respective thermal power plants across India.
- The total inventory of all solid fuels, met coals, PCI and Anthracite at the various ports in India exceeded 33 million tons at the end of April 2020
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