State-run Coal India Ltd. (CIL) is heading towards its highest Apr production ever with the miner accelerating production to 35.3 mnt in the first 20 days of Apr’22.
Currently, production averages 1.77 mnt/day in Apr, which is around 26% higher than the year ago-period. At this pace, the company would reach 53 mnt of coal production by the end of Apr.
The previous highest production for Apr was attained during FY’20 when CIL registered output of 45.29 mnt at an average of 1.51 mnt/day in Apr’19.
Production falls in April
Following a similar trend compared with previous years, production volumes in Apr were cut back compared to Mar’22 levels, when CIL produced coal at an average of 2.59 mnt/day.
The company tends to lower its production levels in the first half of every fiscal, thereby liquidating the surplus inventory available at mine pitheads. Subsequently, production is gradually increased towards the second half to replenish the stock levels.
CIL has begun the new fiscal with pithead inventory of 60.71 mnt. This implies that production, initially, would remain subdued in order to avoid any unpleasant circumstances due to the piling up of inventory.
Dispatches struggling to keep pace
CIL’s coal dispatches at 37.97 mnt during the 20-day period of Apr were higher than the corresponding period of last year.
However, escalating power demand driven by the post-pandemic economic buoyancy and a hotter-than-usual summer are dwarfing the upsurge in supplies.
Average dispatches in Apr were up 5% than the year-ago period, but have exhibited a declining trend over the past few months.
The miner was supplying coal to the tune of 2.05 mnt/day in Feb, which inched down marginally to 2 mnt/day in Mar. Indicating further downside, dispatches were recorded at 1.9 mnt/day during Apr.
This situation has put the power plants in a tight spot as their coal inventories have started to decline at a faster rate in peak summer, assessed at 22.27 mnt on 19 Apr against 25.43 mnt on 1 Apr.
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