Coal Ministry Monitors Fuel Offtake Amid Rising Industrial Stocks
Coal offtake under watch as industry builds stocks
The Economic TimesImage: The Economic Times
The Coal Ministry of India is monitoring coal offtake by state nodal agencies due to rising buffer stocks in the informal industrial sector. Overall coal stock has increased to 224 million tonnes, while state agencies have only utilized 15% of the allocated coal, leading to concerns about supply and pricing amidst rising international coal prices.
- 01Coal stock in India has increased to 224 million tonnes from 201 million tonnes last year.
- 02State nodal agencies have only utilized 15% of the allocated coal for the last fiscal year.
- 03International coal prices are rising, with a recent increase from $67 to $77.40 per metric tonne.
- 04The rise in coal prices is anticipated to affect domestic market rates.
- 05Limited storage capacity and working capital issues are hindering coal offtake by state agencies.
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The Coal Ministry of India is closely monitoring coal offtake by state nodal agencies amid reports of increased buffer stocks in the informal industrial sector. Currently, the overall coal stock in the country stands at 224 million tonnes, a rise from 201 million tonnes last year. The ministry has reached out to states to assess their requirements and ensure adequate supplies at Coal India-notified prices. Despite this, offtake by state agencies has only marginally increased, with only 15% of the 1.26 million tonnes allocated for the last fiscal year being utilized. The limited storage capacity of small and medium industries, along with locked working capital, is cited as a major reason for the low offtake. Additionally, international coal prices have risen significantly, with the Platts CFR India 4,200 kcal/kg GAR increasing from $67 to $77.40 per metric tonne. This rise is expected to further impact domestic market prices, prompting small industrial units to build their fuel stocks during the high-demand period.
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The monitoring of coal offtake and rising prices may lead to increased costs for small industrial units, affecting their operational expenses.
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