Coal news and updates

Power prices slide to Rs 1 per unit as Coal India steps up supply

Power prices at exchanges have dipped to nearly Rs 1 per unit following monopoly miner Coal India's bid to meet annual target by pushing larger volumes in the last few weeks of the financial year amid a decline in demand.

The state-run producer is trying to clear supply backlog to power plants, with the result that producers have accumulated about 20 million tonne of coal, the highest in the past few years. The surplus stock has pushed prices down by about Rs 1.50 per unit over the past month. "Demand for power has also dipped by some 10,000 MW in the past few days mostly due to Holi and the weekend," said an official of Indian Energy Exchange.

According to CIL officials, by end of January, the miner was short of its annual target by about 120 million tonnes. In order to meet its yearly quota, the company produced and sold about 40 million tonnes of coal. By the end of February, though, it was still short of target by about 70 million tonnes.

Coal India is unlikely to meet its annual target, officials said, although the miner is trying to sell as much as it can until March 31. Power demand is not likely to rise substantially by the end of the month as the weather is not forecast to see a rapid rise in temperatures.

Most power companies are, however, obligated to buy the volume of coal that Coal India is pushing, a senior official said, explaining that the volumes are based on the supply agreement that Coal India firms up with its consumers at the beginning of the year.

source: http://economictimes.indiatimes.com