CIL: Coal Production Down 8% M-o-M in Jul’17

CIL’s coal production has fallen for the second consecutive month, as the miner look to increase offtake in order to reduce stockpiles.

Coal consumption in the country has been affected by slow demand from Power sector, which is CIL’s major consumer. Seasonal low power demand due to rainy season and power utilities utilising their own coal inventories has forced CIL to limit its production according to the required demand.

CIL had set a monthly coal production target of 37.66 MnT for Jul’17, which was quite low in comparison with the previous month’s target. The coal miner managed to achieve 97% of the target with the production of 36.64 MnT coal during the month.

Monthly production in Jul’17 was 8% less than 39.66 MnT coal produced during Jun’17.
Also, Coal production during the first four months of FY18 (Apr’17-Jul’17) was recorded at 155.48 MnT, down by 4% Y-o-Y compared with 162.13 MnT during Apr’16-Jul’16.

CIL had set production target of 168.03 MnT during Apr’17-Jul’17 period.

Coal Offtake:
Coal offtake during Jul’17 has outpaced coal production for the fourth straight month in FY18, indicating CIL’s efforts to clear excess stocks.

Coal Offtake had increased 7% Y-o-Y to 44.33 MnT in Jul’17 compared with 41.48 MnT in Jun’17.

Although coal offtake has fallen 2% M-o-M in Jul’17, the total coal offtake during Apr’17-Jul’17 increased 4% Y-o-Y to 181.7 MnT, compared with 174.41 MnT during Apr’16-Jul’16.

Monthly Performance of Subsidiaries:
Mahanadi Coalfields Ltd (MCL) overtook South Eastern Coalfields Ltd (SECL) to become largest coal producer in Jul’17. However, only North Eastern Coalfields (NEC) recorded growth in coal production during the month among the 8 subsidiaries, with an increase of 25% to 0.02 MnT in Jul’17.

NEC along with Central Coalfields (CCL), Northern Coalfields and Western Coalfields (WCL), managed to achieve their monthly production target.

In terms of Coal Offtake, highest coal sales were recorded from SECL during the month.

SECL has recorded coal offtake of 11.93 MnT in Jul’17, thereby achieving its offtake target for the month, along with NCL, WCL and CCL.

Bharat Coking Coal Ltd (BCCL) and WCL have recorded growth in coal offtake during the month.