India: Domestic coal rake movements fall 7% m-o-m in August

As per data maintained with CoalMint, movement of rakes carrying domestic coal fell by 7%, m-o-m, at 11,624 in August 2022.

However, movement of rakes carrying imported coal remained rangebound at 3,159, a marginal drop of six rakes from July.

Overall, coal rake movement dropped by 6% m-o-m to 14,783 rakes in the month.

Each rake carries 3,900 t (approx) of coal, which means that the Indian Railways dispatched about 57.65 million tonnes (mnt) of coal in August by means of 14,783 rakes.

Why domestic rake movements fell?

The fall in domestic rake movement was because of the drop in coal production and dispatches during monsoons. India’s coal production and dispatches both fell by 4% and 6% m-o-m in August to 58 mnt and 63 mnt, respectively.

Imported coal rake movement growth halts

For the first time in FY’23, the growth of imported coal rake movement has halted. This is due to the withdrawal of the Power Ministry’s directive to power plants to blend 10% of imported coal instead of 5% in August.

In addition, seasonal fall in industrial coal demand during the monsoon discouraged imports, thus limiting rake movement.

Zone-wise rake movement

• The top three railway zones that handed about 65% of total coal rake movements in August were East Coast Railways, East Central Railways and South East Central Railways. But there was a drop in coal traffic compared to last month.
• The Central and South Central zones saw an increase in traffic to the tune of 17% and 10%, m-o-m.

In the case of domestic coal, the highest rake movements were observed in the East Central Railways, South East Central Railways and East Coast Railways. Together these zones handled 69% of total domestic coal traffic.

Moreover, East Coast and Western Railways handled the highest imported coal traffic. They together constituted two-thirds of imported coal dispatches.

Railway division-wise coal traffic

• Dhanbad,,Bilaspur and Khurda Road divisions handled almost 60% of total coal dispatches in August.
• Dhanbad and Bilaspur divisions’ coal traffic fell by 14% and 8% m-o-m.
• Secunderabad and Nagpur divisions’ coal rake movements went up by 21% and 14% m-o-m.

• Khurda Road division transported the largest quantity of imported coal at 3.85 mnt, up 16% m-o-m.

Outlook

In the near term, domestic coal rake movement is expected to increase on rising domestic coal production but a lot depends on whether the monsoon will extend further. Imported coal rake movements are likely to fall as India’s coal imports fell by 13% m-o-m in August to 21.5 mnt.