Monthly Summary Of Domestic Coal

MONTHLY SUMMARY OF DOMESTIC COAL Comparative Price of Domestic Coal: Power/Non-power.

*The price shown in the Chart below is without: (a) Surface Transportation Charges. (b) State specific taxes. (c) Coal company or area wise charges if any. (d) Evacuation Facility Charges INR 50 per tonne w.e.f. 00:00 of 20.12.2017

GCV (Kcal/kg) (Mid-value) G3-6400-6700 G5-5800-6100 G7-5200-5500 G10-4300-4600 G11-4000-4300 G12-3700-4000

Basic ROM price (Rs./te) 3144/ 3144 2737/2737 1926/2311 1024/1228 955/1145 886/1063

Tentative Ex-Mine Price* 4447/4447 3941/3941 2932/3411 1809/2063 1724/1959 1638/1858

COAL

* India's coal stocks breached 100 million tonne (mt) as power demand weakened, leading to lower coal sales since the outbreak of the novel coronavirus. Coal India officials said the company continues to produce around 2.5 mt of coal daily, but less than 2 mt was dispatched to the power sector in the past 15 days which led stocks to pile up drastically in its pitheads. While the coal stocks in the Maharatna company peaked to around 60 mt, coal stocks in power plants rose to 41.41 mt – the highest ever inventory level in the country till date.

* Coal India receivables from power companies crossed Rs 13,800 crore in February, increasing almost 71% since April 2019. A set of stategovernment owned power plants from Uttar Pradesh, West Bengal, Andhra Pradesh, Tamil Nadu and Rajasthan are not paying dues regularly on time which has inflated the overall receivables. All this has bloated the total receivables by Rs 5,700 crore this year.

* India's coal imports registered a decline of 14.1 per cent to 17.01 million tonnes (MT) in February in the wake of the coronavirus outbreak, as per industry data. The country's coal imports in February last year stood at 19.82 MT.

* Coal India is likely to produce 600-610 million tonnes and sell 590-600 million tonnes this year, about the same as last year. The company needs to raise output by 400 million tonnes to meet its target of 1 billion tonnes by 2024. This requires its compounded annual growth rate to accelerate to 14% from the much slower 3.1% it achieved in the past four years

RAILWAYS

* Indian Railways all set for a big boost! Soon, passenger train operations, freight train operations and many other railway areas will get a major uplift. Prime Minister Narendra Modi chaired Union Cabinet recently approved a Memorandum of Understanding (MoU) signed between Piyush Goyal-led Railway Ministry with Germany’s DB Engineering and Consulting GMBH for technological cooperation in the railway sector. According to a Cabinet release, the MoU was signed in the month of February 2020. The Railway Ministry further stated that the MoU for technological cooperation in Railway Sector will enable cooperation in many areas.

POWER

* India’s electricity demand plummeted this week as factories and offices were forced to close due to the Covid-19 lockdown. Peak demand touched a low of 135 GW against an average of about 155 GW in March last year, pushing spot power prices on the Indian Energy Exchange (IEX) to a near-record low.

* Lower power demand induced by coronavirus has driven down spot electricity prices with ‘day ahead market’ rates for March 25 delivery falling down to Rs 1.95/unit. The spot power rate was Rs 3.3/unit in the same day last year. The volume of spot power contracted for March 25 through the Indian Energy Exchange (IEX) is 77.5 million units (MU), 43% lower than last year’s amount.

*Renewable energy projects have attracted investments of about Rs 1.34 lakh crore between April 2017 and January 2020. most of the grid connected renewable energy projects are being implemented by private sector developers selected through transparent competitive bidding process. India has set an ambitious target of having 175GW of clean energy by 2022 which includes 100GW of solar and 60GW of wind energy.

CEMENT

* Several cement producers have responded to the coronavirus pandemic with plant closures. Reuters has reported that India Cements has temporarily closed all of its plants. JK Lakshmi Cement has suspended cement production at its 4.2Mt/yr integrated plant in Jaykaypuram, Rajasthan and at three grinding plants. JK Lakshmi subsidiary Udaipur Cement Works has shut its 1.6Mt/yr integrated Udaipur plant, also in Rajasthan.

* The domestic cement industry’s capacity utilisation is likely to moderate in FY20 to sub70% levels, says ICRA Ratings. The demand revival trend witnessed in recent months is likely to continue in the fourth quarter of FY20. This growth along with expected higher capacity additions at 20-22 million tonnes per annum (MTPA) in FY20/FY21 (17 MTPA in FY19) is likely to result in moderation of industry’s capacity utilisation in the current fiscal.

STEEL

* Indian steel mills are likely to face more competition from rivals across the border in China after Beijing sought to raise export incentives on the primary infrastructure alloy by a third to help cushion the impact of demand destruction at home and overseas. The Chinese move to raise export rebates to 13% from 10% for a large number of steel products might also prompt some Indian steelmakers to seek higher border tariffs if imports were to surge now.

* India's finished steel exports plunged 8% in February from a year earlier, their first decline in eight months, government data showed, as demand from traditional buyers in Europe and South East Asia contracted due to coronavirus outbreak. India, the world's second-biggest steel producer, shipped 570,000 tonnes of finished steel in February, as against 619,000 tonnes a year ago.

* The primary focus of National Steel Policy 2017 is installing a crude steel capacity of 300 MT in the country by 2030-31. The current installed capacity in crude steel stands at 147 MT and working capacity 3/13/2020 www.ccai.co.in Page 8 of 15 at 142 MT. Thus, the projection is to add around 158 MT steel in the next 12 years at a compound annual growth rate of 6.4%.