Coal supply to non-power sector declines in January 2022

The coal supply to non-power sector (NPS) industries such as captive power plants (CPP), steel, cement, sponge iron and others declined in January 2022 compared to the same month in 2020. Cumulatively, last month, these five segments were supplied 12.33 million tonnes (MT) of coal, a decline of 17.42 per cent against January 2020.

Coal dispatch to various sectors (million tonnes)

Overall, the total coal despatched by Coal India (CIL), its subsidiaries, Singareni Collieries Company (SCCL) and captives rose 10.80 per cent to 75.55 MT in January this year, compared to January 2020. However, the growth is largely attributed to the increase in coal supply to the power sector, which rose 18.70 per cent to 63.22 MT in January 2022 against January 2020.

Supply to non-power sector down

Except power sector, the supplies to all other industries fell in January. For instance, coal dispatch to CPPs fell 14.06 per cent to 4.28 MT in January this year against the same month in 2020. Similarly, the supply of the dry fuel to steel, cement and sponge iron industries fell 19.38 per cent, 20.39 per cent and 28.71 per cent to 0.73 MT, 0.69 MT and 0.66 MT, respectively, during the same period. Coal dispatch to other industries, too, fell 17.63 per cent to 5.97 MT.

The data for FY21 has not been used for comparison as the fiscal has been considered as an abnormal year due to the Covid-19 pandemic. Overall, India’s coal production increased 6.13 per cent to 79.60 MT in January 2022 against January 2020. Out of this, CIL registered a growth of 2.35 per cent by producing 64.50 MT coal, SCCL’s production was up 5.42 per cent at 6.03 MT and captive blocks registered a growth of 44.91 per cent at 9.07 MT.

Although CIL, SCCL and others have been ramping up their production of the dry fuel consistently in the past few months, but analysing the data shows that coal supply to cement, steel and sponge iron industries has been consistently down since October last year. The coal dispatch to CPPs has also been declining since November 2021, however, supply by captives has been risen consistently in the last six months.

Coal supplied by Railways declines in January

Amidst the coal shortage at thermal power plants, the Indian Railways also ramped up the rakes carrying the dry fuel across the country. However, against a daily average loading plan of 301 rakes in January 2022, the actual average loading of 259.6 rakes was achieved. In comparison during January 2021, a daily average loading of 216.7 rakes was achieved. The daily average rakes supplied in January is the second highest this fiscal year after December 2021. During December 2021, the actual average loading of 264.6 rakes took place.

Industries complain to PM

Industry associations complained to the Prime Minister that while the demand-supply situation had shown signs of improvement around November 2021, the supply to non-regulated sector (NRS) including CPPs has declined. This happened even as October-March is CIL’s highest production period.

On February 7, Aluminium Association of India, Coal Consumers Association of India, Confederation of Indian Textile Industry, Indian Captive Power Producers Association, UP Paper Mill Power Plant Owners Association, Sponge Iron Manufacturers Association, Fertiliser Association of India and the Vidarbha Industries Association complained to the Prime Minister on the supply crunch. They claimed CIL has not given any clarity on how long the supply crunch will continue, which is creating an environment of “uncertainty and panic”.

The non-regulated sector consumers, however, have been claiming that they are receiving less than 3 lakh tonnes a day against their requirement of 5 lakh tonnes of coal daily for operations. Industry sources blamed low availability of coal for NPS to diversion of rakes in the name of “priority”.

CIL says sufficient stocks available

After several industry association complained to the Prime Minister over the supply shortage, CIL on February 12 said that it is currently supplying around 3.4 lakh tonnes of coal per day, which is the miner’s average supply to the non-power sector (NPS) industries. The state-run miner said it has sufficient stocks to serve the NPS industries.

“With over 37 MT of coal at its pit heads, CIL aims to further step up supplies to this sector. CIL’s despatch to NPS during April-January FY22 at 101.7 MT was up 8.2 per cent compared to 94 MT in corresponding period of a standard pandemic free FY20,” CIL had said in a statement last Saturday.

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