There has been no improvement in demand for coal from the largest consumer of Non Coking Coal—the power sector. This is testified by the recent available consumption data by the sector during the first three quarters of the current fiscal.
During the Apr-Dec’16 period, coal dispatches of Coal India Limited (CIL) to the power sector dipped by 3.6% to 288.2 MnT against that at 299.1 MnT in the corresponding period of the last fiscal.
However, the overall dispatches of the coal major during the first three quarters of FY17 were marginally up by 0.6% at 391.7 MnT as compared with that in the Apr-Dec’15 period.
| Dispatch to Power Sector | ||||||
| Dec’16 | Dec’15 | %Change | Apr-Dec’16 | Apr-Dec’15 | %Change | |
| CIL | 35.916 | 37.521 | -4.3 | 288.261 | 299.153 | -3.6 |
| SCCL | 5.136 | 4.505 | 14 | 36.459 | 35.641 | 2.3 |
Source: Coal Ministry
The low demand from the power sector also poses a pertinent question: Will CIL be able to sale its entire production during FY17? CIL has set a target of producing 598 MnT of coal in FY17.
The low demand from the power sector is attributed to the poor financial health of the distribution companies, restricting them to buy more power. To relive the financial distress of the distribution companies the government has issued the Ujwal Discom Assurance Yojana (UDAY) bonds.
Source:CIL
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