Coal dispatches to the power sector in India in the first half of FY2023 (April-September 2022) stood at 356.5 million tonnes (mnt), up 17% y-o-y. Coal supplies to the power sector rose amid a surge in power demand in the country during summer.
This in turn had resulted in curtailment in supplies to the non-power sector. As a result, coal dispatched to the non-power sector fell by 17% y-o-y to 60 mnt in H1FY2023. This drop is despite the fact that overall coal dispatches increased by 39 mnt in the said period. The country’s coal dispatches stood at 417 mnt, a rise of 10% y-o-y.
Non-power: CPP the biggest losers
The non-power sector consumers include aluminium, cement, sponge iron, paper, ceramics, tea, textile and captive power producers (CPPs). CPPs used and managed by industrial or commercial units for their own energy consumption, received the highest quantity of 17.5 mnt of coal. However, this segment registered a drop of 20% y-o-y in H1FY2023.
However, supplies to the steel sector increased 45% y-o-y to 4.23 mnt. Meanwhile, sponge iron and cement sectors remained range-bound, whereas coal allocation to the remaining sectors saw a downtrend.
Company-wise dispatches: H1FY’23
CIL registered a growth of 8% y-o-y by dispatching 332 mnt of coal.
- Mahanadi Coalfields Limited (MCL), the largest coal subsidiary of CIL, supplied 13.5 mnt of more coal during April-September, 2022 as compared to the same period last year.
- Eastern Coalfields Ltd (ECL) and Western Coalfields Limited (WCL) were the only two subsidiaries in which dispatches fell from last year.
Captive miners showed a phenomenal growth of 43% y-o-y by dispatching 55 mnt of coal in the said period. However, Singareni Collieries Company Limited (SCCL) registered a negative growth of 6% y-o-y because mining activities were disturbed by heavy rains.
Coal dispatches in Sep’22 stable y-o-y
India’s coal dispatches stood at 61.2 mnt during September 2022 as compared to 60 mnt during September 2021. During September 2022, CIL, SCCL and captives/others registered a growth of 1.03%, 4.13% and 6.84% by despatching 48.9 mnt, 4.8 mnt and 7.5 mnt, respectively. Moreover, the power utilities’ dispatches grew by 3.1 % to 51.7 mnt in the same period. However, for the non-power sector, these fell by 3.75% to 9.5 mnt.
Outlook
Continuing the momentum, production and dispatches are expected to grow at a higher rate in the second half as there will not be much impact of rains. However, the rate of growth in coal production needs to increase further to satiate the demand from both the power and the non-power sectors.
In case of the non-power sector, market participants are struggling to receive adequate supply. Meanwhile, for the power sector, coal stocks need to be augmented for next summer so as to avert the possibility of a power crisis that the country faced this summer when demand spiked to an all-time high.
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