Coal news and updates

Poor demand lowers coal price to Rs 4,000/tonne

Conditions at domestic and international markets seem to have swung in favour of coal consumers as the commodity is showing considerable drop in the prices. From its peak in the recent past, coal prices have dipped by more than half.

In April-May 2022, thermal coal prices were trading in the range of Rs 12,000 to Rs 15,000 per tonne (including taxes). However, it has now come down in the range of Rs 4,000 to Rs 6,000 per tonne (including taxes). The prices are ex mine. Rajendra Bansal, General Secretary of Central India Coal Dealers’ Association, attributed the price drop to the poor demand for the commodity.

“There is a slowdown in the market due to which the industrial category coal consumers are not lifting the commodity to their capacity. On the other hand, enough coal is available in the international markets. Many coal producing countries are also pushing the commodity in the markets which has increased the availability of coal,” he explained.

Power gencos and steel manufacturers, who are major consumers of coal, are also witnessing a drop in demand which is further widening the gap between demand and supply.

It is important to note that in the post pandemic phase, coal had witnessed sudden demand and the prices hit the roof. In the last season, the Russia-Ukraine war had also impacted the coal supply scenario due to which the prices went up manifold. Power generating companies, steel manufacturers and other consumers were worst affected during the period. But now, the market is witnessing enough supply of coal. The miners are dumping enough quantities of coal in the market. In the meanwhile, city-based coal miner Western Coalfields Limited (WCL) is all set to auction about 2.25 lakh tonne coal on Friday. According to market experts, the commodity is likely to see a price range of Rs 3,500 to Rs 4,500 per tonne (including Govt levy).