The total coal stocks, held by Coal India at its pit-heads, by power plants and by  importers at ports have seen a decline of about 10 million metric tonnes (MMT) in the month of June.

The total coal stocks as of June 30, 2020 were 150.11 MMT as compared to 160.56 MMT at the end of May.

Coal India’s stocks declined by 2.4 MMT in June and stand at 75.1 MMT as of June 30.  The stocks at power plants also declined by about 2.4 MMT and stand at 47.16 MMT as of June 30. Stock levels at various ports saw the steepest decline of 5.63 MMT and the consolidated stocks at ports now stand at 27.85 MMT as of June 30. (Please see attached PDF)

As a result of the Covid 19 related lockdown, demand for coal fell quite steeply and Coal India, despite producing at lower levels since April has not been able to reduce its stock levels.

Even imports which started declining since Mar 2020 continued to build stock at ports as demand was not forthcoming.

However, since June 3rd, when the lockdown was lifted, and economic activity started gaining momentum, demand has returned and this is now leading to lower stock levels.

Power production is slowly limping back to 2019 levels. India’s electricity generation during the first half of July fell at a slower pace than in June, provisional government data showed, as industries and commercial establishments opened up after further following gradual easing of lockdowns.

Power generation fell 3.1% in the first 15 days of July compared with the same period last year, a Reuters analysis of daily load despatch data from federal grid operator POSOCO showed, compared with a 9.9% fall in June.

In the second half of June, electricity generation declined 5.3%.

In an attempt to reduce its stocks and reduce India’s dependence on imported coal, Coal India is stepping up its efforts to attract more customers.

In June 2020, Coal India’s performance at the e-auctions was not encouraging

Spot premium was 13% over notified price Vs 55% in June last year. Offered quantity was 14.31 mmt and quantity booked was 3.68 Mmt.

In Special forward, there was no premium in June Vs 128% last year. Offered quantity was 1.4 Mmt and quantity booked was 0.64 mmt.

In exclusive auctions for non-power sector, June premium over notified price was 6%  Vs 24% last year. Here, the offered quantity was 2.33 mmt and booked was 0.56 mmt.

In Special spot, premium was 11%. Offered quantity was 5.47 mmt, and booked was 0.95 mmt. There was no offering under this category in June 2019.

Total offered was 23.52 Mmt and booked was only 5.83 Mmt or 25%. Average premium was 11% vs 47% last  June.

To further push its efforts Coal India is now offering coal in an exclusive auction to Coal importers. Coal India Ltd (CIL) on Friday July 17, said it has introduced a new category of spot e-auction for importers only and aimed at replacing 150 mmt of the fuel sourced from abroad with domestic supply.

The coal procured under the “special spot e-auction scheme 2020 for import substitution” will be for use within the country.

Indian buyers including traders who imported coal at any point of time in the current fiscal or in the previous two financial years are eligible for participating in this new version of e-auction.

The minimum bid quantity is pegged at 25,000 tonne for a source in case of road mode transportation. For rail mode transportation, it is at 50,000 tonne, which is equivalent to 12 rakes, Coal India said in a statement.

This analysis has been compiled by obtaining data from Iman Resources’ sources.


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