CIL gradually increasing supply to power sector to meet gap from lower coal imports

PSU miner Coal India (CIL) is gradually increasing supply to the power sector, with demand for domestic coal rising in the wake of higher imported coal prices.

Power plants, mainly in the coastal region, generally opt for imported coal when domestic coal costs more due to freight and statutory levies. But with Indonesia benchmarking coal prices for September at $150.03 per tonne, demand for domestic coal has soared.

“We are aiming to augment supply to the power sector at 1.45 million tonne (MT) per day, and total supply to a level of 1.8 MT a day consistently,” a senior CIL official said.

In the first eight days of September, the miner has clocked 20% growth in supply to the power sector at an average of 1.39 MT per day. The figure for the same period last year was an average 1.16 MT. Total supply was 1.71 MT per day during the first eight days of the month, compared to 1.49 MT per day last year — an increase of nearly 15%.

E-auction booking was up 42% during April-August this fiscal at 53.3 MT under five auction categories, compared to 37.5 MT during the same period last fiscal. E-auction bookings witnessed a more than two-fold increase when compared to the pre-pandemic period of April-August 2019, when booking was 20 MT.

The add-on during April-August this fiscal fetched an average premium of 30% over notified prices, which were still around 20% lower than international prices.

Due to the increase in international prices, non-power sector customers opted for domestic coal under their exclusive auction window, accounting for 37% or 19.7 MT of the total auction bookings during April-August. These customers booked 70% of the total offered quantity, the official said.

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