India’s coal demand will continue to improve year-on-year (yoy) as the end-user industrial activities gradually gain pace with unlocking and inventory levels at power stations being normalized, according to India Ratings (Ind-Ra), a research agency.
The company said in its monthly report on India’s coal sector that coal offtake continued to recover strongly in October 2020 to 54.5 million tons (mt), higher by 8.7 per cent month-on-month (mom) and 20.1 per cent y-o-y.
This was driven by a strong recovery in domestic power demand in October 2020 which rose by 11.4 per cent y-o-y as against 3.8 per cent in September after six consecutive months of a low demand.
The increased demand was also partially fed by the inventory built at power stations. Also, domestic coal production continued to improve in October 2020 to 50.7 mt, higher by 15.6 per cent month-on-month and 13.9 per cent y-o-y.
“The output in 2HFY21 is likely to be supported by higher overburden removed in 1HFY21, about 7 per cent year on year, from open cast mines (around 94 per cent of total production),” the firm said in a statement.
