Coal news and updates

Dec core sector growth slows to 0.9% y-o-y

The output of the eight core industries grew 0.9% in December 2015 on the back of a strong showing by the coal, power and fertiliser sectors.

This performance was much better than in November 2015, when the cumulative output contracted by 1.3%. However, the growth in December 2015 was lower than the 3.2 per cent growth posted in December 2014.

For the April-December period this fiscal year, the core industries’ output grew 1.9%, much lower than the 5.7% growth seen in the corresponding period last year.

In December 2015, coal output grew a robust 6.1%, higher than the 3.5% growth in the previous month.

For the month under review, fertiliser output grew 13.1% (13.5% in November 2015), electricity output grew 2.7% (0%) and cement grew 3.2% (-1.8%).

Steel output contracted 4.4%, largely due to increased competition from imports and some cases of dumping. Refinery products output grew 2.1% in December 2015.

Commenting on the latest data, Devendra Kumar Pant, Chief Economist, India Ratings & Research, said that the core sector numbers point towards a mild expansion in industrial output in December 2015.

After negative growth in November 2015, mild growth provides some relief to industrial output in December, he said.

The eight core industries’ have 38% weightage in the overall index of industrial production.

Despite limited private sector mining, Coal India’s efforts have resulted in growth in domestic coal production and a reduction in reliance on imported coal, Devendra said.

Meanwhile, CARE Ratings said in a statement that the steel sector had registered six successive months of negative growth, which is a concern.

The Index of Industrial Production (IIP) growth for December would again be subdued with higher growth possible only in consumer goods and capital goods, the CARE Ratings statement said.

Prima facie a growth rate between 2-3% could be expected based on past trends, it added.

SOurce: ISMW