Coal India reverses output drop as power plant stockpiles plunge

Output in August rose 16 per cent from a year ago to 37.63 million tons.Company SummaryNSEBSECoal IndiaLoading data…

PEER COMPANIES Coal India Ltd., the world’s biggest producer of the fuel, reported the first increase in monthly production on a year-on-year basis in five months after power plant inventories plunged and the miner’s own stockpiles declined.

Output in August rose 16 per cent from a year ago to 37.63 million tons, according to Bloomberg calculations based on a stock exchange filing by the company on Friday. Shipments rose 19 per cent to 43.75 million tons, advancing for 10 straight months.

Inventories at power plants, the biggest users of coal in the country, dropped to the lowest since December 2014 as of August 28, with several plants running at less than seven days of stockpiles, a critical benchmark.

Coal India, which had trimmed output over the past few months to reduce its own stockpiles, is now seeking to replenish the falling inventories at power plants. Its own stocks have fallen below a targeted 40 million tons, a company official told Bloomberg News earlier this week.

“Going forward, we’ll see the gap between shipments and production reducing,” said Rupesh Sankhe, an analyst at Reliance Securities Ltd. in Mumbai. “Coal India will continue to maintain the current level of inventories, and for that production has to rise now.”

Coal India reported a 10.5 per cent decline from a year ago in output August last year, while its shipments dropped 9.6 percent during the same month.

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