Coal news and updates

Growth in eight core industries slipped to 2.1% in July on the back of contraction in coal, crude oil and natural gas production, government data showed on Monday.

Eight core sector industries, which include coal, crude oil, natural gas, refinery products, fertiliser, steel, cement and electricity, had expanded by 7.3% in July last year.

These core industries comprise 40.27% of the weight of items included in the Index of Industrial Production (IIP).

“The eight core industries comprise 40.27% of the weight of items included in the Index of Industrial Production (IIP). The combined Index of Eight Core Industries stood at 131.9 in July, 2019, which was 2.1% higher as compared to the index of July, 2018,” the Ministry of Commerce and Industry said in a statement.

Output of coal, crude oil, natural gas and refinery products recorded negative growth during July.Similarly, the growth rate in production of steel, cement and electricity declined to 6.6%, 7.9% and 4.2%, respectively, as against 6.9%, 11.2% and 6.7%.

However, fertiliser output marginally grew by 1.5% in July as against 1.3% in July 2018.For April-July period, the eight sectors’ growth rate almost halved to 3% as compared to 5.9% in the same period last year.

The growth rate of these eight sectors is declining since April this year. It slowed down to 5.2% in April from 5.8%. Then it came down to 4.3% in May and 0.7% in June.

The Gross Domestic Product (GDP) data too has shown deceleration with the growth rate coming down to over six year low of 5% in the first quarter of the current fiscal, mainly on account of sharp dip in the manufacturing sector, which registered almost a flat growth of 0.6%. 

The core sector data offered mixed cues, with the moderately healthy growth of cement and steel output juxtaposed against the year on year contraction in four indices, namely, coal, crude oil, natural gas and refinery output, according to experts.

“A pickup in government spending after the Union Budget may support cement and steel production in the next few months,” said Aditi Nayar, principal economist at Icra.

“Coal output reverted to a year on year contraction after 24 months in July 2019. With a deepening contraction in the output of Coal India in the just-concluded month, a continued year on year decline in coal production is likely to weigh upon core sector as well as mining growth in August 2019.

The halving in the growth of electricity generation was led by an easing in the expansion of thermal electricity generation to 6.2% in July 2019 from 8.7% in June 2019, as well as a sharp downtick in the expansion of hydroelectricity generation to 0.3% from 7.5%, respectively.”

 

 

Source : https://www.dnaindia.com