As per the data maintained with CoalMint, movement of rakes in India carrying imported coal rose by 17% m-o-m in July at 3,165. Movement of rakes carrying domestic coal fell by 7% m-o-m, however, at 12,502 in July.
Overall, coal rake movement dropped marginally by 2% m-o-m to 15,667 rakes in the month.
Each rake carries of 3,900 t (approx) of coal, which means that the Indian Railways dispatched about 61 mnt of coal in July through 15,667 rakes.
Why domestic rake movement fell as imports rose?
The fall in domestic coal rake movement was because of the drop in coal production and dispatches during monsoons. India’s largest coal miner, Coal India’s (CIL) production and dispatches both fell by 8% m-o-m in July to 47 mnt and 54.5 mnt, respectively.
On the other hand, imported coal rake movement increased as the Indian government has been encouraging power plants to use more of imported coal for blending amid domestic shortage. In a directive issued in April this year, India’s Power Ministry asked utilities to import 10% of their coal requirements for blending purposes. In fact, the Power Ministry had warned of cutting domestic coal supply by 5% to generating companies (gencos) if they did not import coal for blending by 15 June.
Subsequently, India’s monthly thermal coal imports increased to a three year-high of around 20 mnt in June and July, leading to the rise in imported coal rake movement.
Zone-wise rake movement in July
- The top three railway zones handling more than 50% of total coal rake movement in July were East Central Railway, East Coast and South Central.
- Central Railway and South Central Zone saw a drop of 51% and 31 % m-o-m, whereas Western Railway zone’s rake movement increased by 38% m-o-m in July.
In case of domestic coal, the highest rake movements were observed in East Central Railway, South East Central Railway and East Coast. Together these zones handled 72% of the total rakes.
- However, Central Railway zone and Central Railway handled 34% and for imported coal, rake movements across the zones rose.
Railway division-wise coal dispatch
- Dhanbad, and Bilaspur handled highest coal traffic in July.
- Dhanbad division transported the highest quantity in July at 14.26 mnt, up 2% m-o-m.
- Khurda Road division transported the largest quantity of imported coal at 3.3 mnt, up by 13% m-o-m.
- Ahemdabad division saw a surge in imported coal traffic by 46%.
Outlook
In August, coal transport through rakes is anticipated to edge down compared to July as sluggish industrial activity during the rainy season is likely to dampen coal demand across the country. Also, dispatches of imported coal via rakes may fall as on 12 August the Power Ministry withdrew the mandatory imported coal blending order it had imposed on all power generation companies under the Electricity Act.
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