Coal supply to non-power consumers ‘improving’

After facing shortages for nearly three months, coal supplies to non-power sector, including steel and cement, have started improving in November, say Coal India (CIL) sources.

A sudden rise in demand and spike in power tariff led Coal India to cater the power sector on priority from August, with growth in supplies to generation stations far outstripping the growth in total supplies. This led to a major disruption in supplies to non-power customers.

According to one industry association, from approximately 30 rakes a day, the supplies came down to half leading to serious disruption in production planning.

“Over and above the drop in supplies, the uncertainty of supplies hurt us the most,” said an industry source on condition of anonymity.

He confirms that supplies, though still way below the desired quantities, started improving over last couple of days.

But he also said it was too early to comment on whether his trend is sustainable.

CIL sources, however, feel that supplies to non-power segment would be restored as production has finally started catching up with demand.

As in October, CIL production increased by six per cent while offtake grew by 12 per cent on a year-on-year basis. The gap between production and off-take was managed by diluting the pit-head stock that came down from 67 million tonne to 29 million tonne between April 1 and October 31.

Overall production grew by 1.6 per cent in the first seven months of the fiscal as against 8.5 per cent growth in despatches.

The good news is that production and off-take run rate matched at 1.6 million tonne a day in the first two days of November, a CIL source said.

Meanwhile, given the problems with rail logistics, CIL is encouraging power stations and other consumers located close to mines to take deliveries by road.

The share of road transport in total coal despatches during April-October improved from 26 per cent to 29 per cent.

To encourage more consumers to take the road delivery option, CIL launched a tracking App.

“The initiative would help better logistics management on the part of consumers as they would know when their turn for delivery would come. Also, the chances of pilferage will be reduced,” a CIL source said.

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