CIL’s coking coal production drops by 13% y-o-y in Apr-Dec ’20

In the wake of COVID-19 related challenges, where Coal India’s overall coal production has been affected, output of coking coal went down at a time when country’s steel industry is still on the path of recovery.

Production of coking coal decreased 13% y-o-y to 26.4 mn t in the first 9 months of FY ’21 (Apr-Dec ’20) compared with 30.24 mn t in Apr-Dec ’19 period.

Although, the company has managed marginal rise in its non-coking coal production, no such improvement was noted in case of coking coal whose production reduced in line with the sluggish steel output.

Notably, domestic crude steel output dropped 12% y-o-y to 71.94 mn t in the 9-month period, data provided by JPC showed.

Subsidiary-wise production

BCCL and CCL accounted for major share in CIL’s coking coal production in Apr-Dec ’20. However, apart from marginal rise registered from WCL, output of remaining subsidiaries had fallen on the y-o-y basis.

Source: CIL | Quantity in Million Tonne

Renewed interest for Imports:

The country has limited reserves of coking coal-a key ingredient for steel-making, which necessitate imports to support its steel sector.

Although, coking coal imports was down 6% y-o-y to 52.41 mn t in CY ’20, as per the data maintained by CoalMint. Free-fall in global coking coal prices led by low procurement from China amid stable supply has improved operating margins of Indian steel mills, thus renewing their interest in imports.

While demand for coking coal is expected to fully recover in near-term and subsequently rise in the long-run to support the various infrastructure projects under pipeline. CIL’s coking coal production is not likely to replicate the performance of previous fiscal when it had attained a 3-year high total.