Domestic

Coal sector facing some headwinds from financial markets: Govt

The government said the coal sector is facing a bit of headwind from the financial markets and that could be one of the reasons for global players not participating in commercial coal mine auctions.

This comes after Coal Minister Pralhad Joshi earlier exuded confidence that in the next round of auctions, there would be participation from global players.

“We had couple of participation with industries in the US and also Indonesia and some other places. We reached out to many people,” Additional Coal Secretary M Nagaraju said. India, he said, has large industrial groups which have financial strength and technological prowess to undertake mining in the country.

Stating the second tranche of auction is the “biggest ever offer of coal mines in the country”, he said the government is offering 67 mines with total reserves of almost 36 billion tonnes. The peak rate capacity of the explored blocks is 150 million tonnes.

NGT directs Centre to file reply on plea against notification on use of coal with higher ash content

The National Green Tribunal has granted one

more opportunity to the Centre to file response on a plea against a notification issued by the Ministry of Environment and Forests (MoEF) which allowed thermal power plants the use of coal with higher ash content than permitted earlier. A bench headed by NGT Chairperson Justice Adarsh Kumar Goel said that no response has been filed by the MoEF and the ministries of mines, power and coal even after nine months.

The NGT asked the secretaries of the four ministries to ensure the response is filed within the stipulated time.

The Central Pollution Control Board may file further response about the impact of the impugned policy on the environment, the green tribunal said while posting the matter for hearing on August 18.

The tribunal was hearing a plea filed by NGO 'Say Earth' against the May 21, 2020 notification issued by the MoEF under the Environment (Protection) Act, 1986, permitting the use of coal with ash content higher than permitted earlier which is causing damage to the environment.

Coal India Ltd's coal offtake rises 38% to 55 million tonnes in May

State-owned Coal India Ltd on Tuesday said its coal offtake rose by 38 per cent to 55 million tonnes (MT) in May on the back of revival of fuel demand from the power sector.

As coal supplies surged ahead to 55 MT in May, CIL recorded a whopping 15 MT increase in volume terms against comparable month last year, logging close to 38 per cent growth, the statement said. Even compared to pre-COVID May 2019, the growth was 5.8 per cent when the company's off-take was 52 MT, it said.

With the appetite for coal signalling healthy recovery, CIL's supply to power sector at nearly 44 MT in May this year was up by 41 per cent. The company supplied around 13 MT more to power plants compared to May last year. Stimulated by increased activity and higher coal consumption, stock at thermal power stations fell by 5 MT in April from that of 28.9 MT at the closure of the last fiscal. However, increased supplies by CIL in May resulted in the coal stock restored to 29 MT at the coal fired plants.

CIL pulls restriction on exporting coal procured through two spot auctions

State-owned CIL has removed the restriction on exporting coal procured through two spot auctions. The development assumes significance as the current inventory of coal behemoth is little over 70 million tonnes (MT).

"The country's largest coal producer and supplier has lifted the embargo on exporting coal procured through spot e-auction and special spot e-auction outlets. This is a first of its kind development since the introduction of spot eauction in 2007," it said.

The existing clause 'coal procured under e-auction is for use within the country and not for export' has now been amended, opening the door for export of the dry fuel in two auction categories.

Allocation under spot e-auction and special spot e-auction together accounted for 46 million tonnes of coal in FY21 which was 37 per cent of the total allocated quantity of 124 MT during the year. Spot e-auction at 42.5 MT was the highest allocated quantity under all the five auction windows, in FY21, fetching 25 per cent add on over the notified price.

Coal shipped overseas 'produced' more emissions than India's

Coal shipped overseas was responsible for a tenth of global annual energy-related CO2 emissions in 2020. Coal exported in 2020 had the potential to produce 3.1 billion tonnes of

CO2 emissions, which is more than India's annual emissions, a new analysis released by Ember said on Wednesday.

The largest exporters, Australia and Indonesia, would see their domestic emissions more than double if these 'Scope 3' emissions from seaborne coal were included.

The largest exporters of seaborne coal are Indonesia, Australia, Russia, and the US. Indonesia and Australia alone are responsible for 59 per cent of global seaborne coal trade at 370 megatonnes each in 2020.

Only two per cent of exports came from countries outside the top 10 exporters. "Despite its significant contribution to the world's CO2 emissions, the coal export sector and coal exporters have largely avoided scrutiny and responsibility," continued Ember's analyst Fulghum.

Meghalaya Govt. Looks To Regulate Coal Mining In The Sate

The Meghalaya Government is looking to streamline coal mining operations in the state. This comes in the wake of the recent mining tragedy. Incidentally, this is not the first time workers have lost their lives to the gaping holes in Meghalaya’s mining policy.

The Government’s Mining Department is now pushing for the adoption of scientific methodologies while mining coal, under the provisions of Mines and Minerals (Development and Regulation) Act, 1957.

Scientific coal mining will remove unapproved and harmful methods for coal mining. It shall encourage the proprietors to adopt modern technology in mining coal reducing risks to human life during the mining operations.

The National Green Tribunal (NGT) had earlier imposed a ban on illegal coal mining projects in the state. But imposing a ban on rat-hole mining has seen a rise in clandestine and illegal mining in the state.

STEEL

Steel prices hiked again, HRC rate up Rs 3,000/tn

Domestic wholesale steel prices have seen a hike of 4.5-6.2% from the beginning ofJune’21 as the prices doubled in the last one year. Industry sources said, with effect from June 1, steelmakers have raised the wholesale price of hot-rolled coils (HRC) by up to Rs 3,000 per tonne taking it to Rs 69,000/tonne in the wholesale Mumbai market. Similarly, the price for cold-rolled coils (CRC) have also been increased by around Rs 5,000 a tonne to Rs 86,000 per tonne.

Buoyant international prices, which have also risen around the same pace in the last one year as in India is driving domestic prices upwards. The buoyancy is largely due to less availability of the material in the international market following largest steelmaking nation China’s decision to discourage exports by withdrawing 13% duty rebates on exports.

However, despite the latest round of price hike, landed cost of imported steel will still be ruling at around 10% premium over domestic prices. Sources in the industry said the gap will provide domestic industry a cushion to increase prices further towards the middle of the current month.

The export rebates have reduced Chinese exports in the international markets, which Indian steel players are looking to bridge. With domestic steel prices at a discount to international price, the import risk into Indian domestic market is largely contained. This has also provided optimism to the domestic steelmakers to increase prices.

RaILwaYS

Indian Railways loads highest ever freight of 114.8 MT in May

Indian Railways' Freight made the highest ever loading of 114.8 Metric Tonne (MT) for the month of May and earned Rs 11604.94 crores from freight loading, said Ministry of Railways. The important items transported during May 2021 includes 54.52 million tonnes of Coal, 15.12 million tonnes of Iron Ore, 5.61 million tonnes of Foodgrains, 3.68 million tonnes of Fertilizers, 3.18 million tonnes of Mineral Oil, 5.36 million tonnes of Cement (excluding clinker) and 4.2 million tonnes of Clinker. "Wagon Turn around time has seen an improvement of 26 per cent in this month. In May, 2021, wagon turn around time is registered at 4.81 days as compared to 6.46 in May 2019," the statement said.

The ministry said that a number of concessions or discounts are also being given in Indian Railways to make railways freight movement very attractive while the speed of freight trains has been doubled over the last 18 months, saving costs for stakeholders.

NCR putting best efforts to make Railways energy efficient

Out of total 6119.55 km, North-Central Railway (NCR) has electrified 5642.91 km of rail track on which 90 per cent of trains are running in the region. The NCR has been able to save Rs 364.27corer worth of diesel oil in the year 202021 which has been considered as a big step towards environment conservation.

In addition, there has been an increased utilization of three-phase electric locomotives that has further helped in conserving energy. The specially designed locomotives have ‘Regenerative Braking’ features which, when used, generate electric energy which is utilized by other electric-run- locomotives available in the section, an official said.

Apart from this, intensive use of solar power in the division has helped in energy conservation. During 2020-21 a total of 11 MWp capacity of solar power plants were installed in various divisions including Jhansi, Prayagraj and Agra generating 10.73 million units of electricity and thus adding Rs.5.13 crore to the exchequer.

STEEL

India's crude steel output grows 46.9% to 9.2 mn tonnes in May: Report

India registered a 46.9 per cent year-on-year growth in its crude steel output at 9.2 million tonnes (MT) in May, according to worldsteel data. The country had produced 5.8 MT steel in the same month a year ago. The production of the 64 countries reporting to the World Steel Association (worldsteel) was 174.4 MT in May 2021, a 16.5 per cent increase compared to May 2020 in which China remained the global leader in the production of steel in May. Last month, Japan's output increased to 8.4 MT from 5.9 MT in May 2020. The US produced 7.2 MT steel in the month under review. Its output was at 4.8 MT in May 2020. While Russia's output last month was at 6.6 MT, South Korea produced 6 MT, Germany 3.5 MT, and Iran 2.6 MT. Turkey and Brazil both produced 3.2 MT of crude steel each in May 2021.

Reduction of carbon emissions from Indian steel industry to be gradual: EY Report

The trajectory of carbon reduction from the Indian steel industry is likely to be gradual owing

to the age of the blast furnaces used and lack of consolidation in the sector, according to a report by accounting and consultancy firm EY.

The report said among BRIC nations, especially Russia, China and India, the trajectory of carbon reduction is likely to be more gradual than the one seen in the West. Many of the region’s BFs are less than 15 years old, making replacement uneconomical at this time.

"Moreover, sector consolidation in China and India, the world’s two largest steel producing countries, is below global average, with many small capacity enterprises operating with less efficiency, more pollutants and a lack of investment in new technologies," the report said.

Indian steelmakers have struggled to gain approval to expand greenfield capacity – brownfield expansions will likely make up most of India’s new production coming online. Controlling emissions will be the central challenge of steelmakers over the decades to come," the report said.

CEMENT

Cement prices stay firm in May despite pandemic

The trend in cement prices has remained resilient despite demand disruption amid local lockdown in various parts of the country. This is because the cement makers continue to prioritise pricing over volume gain. All India average cement price improved by 1.1% sequentially in May to Rs 356 per 50 kg bag. Compared with the year-ago level, it was a tad lower by1.3%.

Analysts are bullish on cement companies following firm prices and a gradual relaxation in lockdown across states. They believe the strategy of focusing on prices instead of volume improvement will pay off in terms of stable or better operating margins before depreciation, and amortization.

An analyst who wished to be unnamed said, “A key reason why earnings of cement companies have been upgraded in recent times is their intention to protect the pricing.” He added that there will be some improvement in margins in the second half of FY22 but it would not be material enough to offset rising raw material costs. “In FY23, we estimate 2-3% improvement in margins,” he said. Large cement companies operate at EBIDTA margins of 13-27%.

Net profit of big cement firms surges 29.6% in pandemic-hit FY21: Report

Pandemic-hit FY21 has turned out to be a good year for the big cement companies, as their net profits surged and market position strengthened, a report said.

The net profits of 10 major listed cement companies surged by 29.6 per cent on an average in FY21, although aggregate revenues grew modestly by 3.8 per cent, according to an analysis undertaken by Acuite Ratings.

The cement volume growth has been disrupted in the April-June quarter of FY21-22 after the second wave of COVID-19, but the sector is expected to see good a recovery post-monsoon led by the government's thrust on infrastructure activities and housing construction.

Besides, cost rationalisation and low-cost inventory played a key role in the expansion of EBITDA (earnings before interest, taxes, depreciation, and amortization) margins, which went up 349 basis points to 24.3 per cent in FY21. Price hikes are undertaken by cement players in the latter part of the fiscal, further supported the profitability improvement.