Coal news and updates

Coal stock lowest since Nov ‘12

Coal stocks, associated with linkage-based power plants, are down to two-year lows in October, data from Central Electricity Authority, shows. Against the average requirement of 21 days, stocks on some days have been at levels of five days, catering for a capacity of close to 98,000 MW. On some days, more than two dozen plants have had less than 7 days of coal stock, an equal number less than 4 days of supply. “There are multiple factors at play, which have compounded coal woes of Indian IPPs. For starters, electricity demand growth has sprung a surprise, averaging 12% growth over Jun-Aug-14, compared with barely 2% in the preceding 12-month period. A weak monsoon seems to have aided electricity demand growth while hydro power generation so far this fiscal has been down 3% YoY," JP Morgan analyst Sumit Kishore explains. While production at Coal India Limted, tends to pick up around mid-November, there could be some uncertainty surrounding captive coal production, although the Supreme Court verdict, allowed production to continue uninterrpted.

He said that monsoon is a weak period for coal production growth, which rendered an otherwise positive sign of thermal power plants increasing their plant load factor (PLF), to negative as the supply did not meet the raised demand. Coal India coal dispatch over Mar-Aug-14 rose 2% YoY, though daily coal linkage of power plants went up 26% to 1.6MMT/day.

Source: The Financial Express