India's coal stocks breach 100 mt as demand weakens in coronavirus crisis

Coal stocks in India have exceeded 100 million tonnes (mt) due to weakening demand for electricity, driving down coal sales since the appearance of the new coronavirus.

Coal India officials said the company continues to produce about 2.5 tonnes of coal per day, but less than 2 tonnes have been shipped to the energy sector in the past 15 days, which has led to stocks to drastically build up in his heads.

While Maharatna’s coal stocks peaked at around 60 tonnes, coal stocks in power plants reached 41.41 tonnes – the highest inventory level on record in the country to date.

Despite the overstock situation, coal production reached a new peak of 3.17 mt on March 20, 2020 – the highest daily production to date – exceeding the production of 3.14 mt recorded on March 25, 2020.

The authorities estimate that another stock of 4 to 5 tonnes will be stocked in the top seeds by the end of the month. Before the Covid-19 epidemic in the country, about 4.5 tonnes of stocks were added every month on average, however, in March 2020, the net addition of stocks should be around 11 to 12 tonnes.

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“It happens because of a cascading effect. The decline in industrial activity is driving down the demand for electricity, which in turn is driving down the demand for coal, “said a senior Coal India official.

In fact, during the first 15 days of this month, when the fear around Covid-19 surfaced, electricity consumption amounted to 51 billion units (BU), which represents 3.6 % less than demand for the same period in 2019.

According to data from the Central Electricity Authority, the coal supply is sufficient for the plants to produce electricity for 24 days without any supply from Coal India.

Company sources suggested that demand for electricity, until the first week of March, had increased year over year, but began to decline thereafter.

The official suggested that measures to contain the Covid-19 epidemic included working from home, which meant lower demand for energy in offices as well as schools, colleges, malls, screens movie theaters, parks and other public places temporarily closed.

“Now that the lockout is in place, the demand for electricity is expected to drop further and so will the demand for coal,” said the Coal India official.

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Despite the epidemic, Coal India has not suspended its mining activities because it considers that the coal production and supply lines must remain open so that electricity production is not affected and that any requirement can be treated .

According to an official at Central Coalfields Ltd (CCL-a subsidiary of Coal India), almost all of the power plants linked to CCL refuse directly or indirectly to accept more coal supplies.

“The obstacles faced by the company have reached an unprecedented level, to the point where electricity consumers have stopped making payments,” said the CCL official.

Coal India, on the other hand, suspended the calculation of its annual inventory measure from April 1 to 15 after the Center and several state governments applied mandatory travel restrictions.

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