Care Rating in the latest report said that India’s coal output increased marginally by 3% in May 2020 compared to the previous month, with India slowly opening up to industry, but still sharply down from the previous year’s pace. On a y-o – y basis, coal production decreased by 15% in May 2020. The national lockdown, which came into effect on 25 March, brought economic activities to a sudden standstill as many factories and offices were shut down and operations were suspended. This high demand for electricity, thereby impacting demand for coal and causing inventories to rise to record levels. The combined inventory of coal and power plants and pitheads and non-pitch heads of commercial coal mining companies in India has increased to three months of average coal production compared to the last fiscal year.
In May, the lock-down steps were slowly relaxed in a number of states and major cities, including Delhi, Bengaluru and Hyderabad, which agreed to reopen some businesses and restrict public transport. However, there was no substantial increase in demand for coal. Several manufacturing firms were unable to resume operations primarily due to labor shortages and liquidity constraints. Power plants were not very eager to lift coal due to low demand and high inventories, and the shipment of coal fell sharply by 26.5 per cent in May. Thermal power generation decreased by almost 20% on a month-to – month basis in April 2020. Thermal plant load factor decreased from 60.3 per cent in February 2020 to 42.4 per cent in April 2020 due to lower demand.
