Coal India Cuts Output 1st Time in More Than Year Amid Glutby
Production falls 3.4% y/y in April to 40.09 million tons
Inventories swollen to 58 million tons as of April 1
Coal India Ltd., the world’s biggest miner, saw production and shipments of the fuel fall year-on-year for the first time in 15 months as sluggish demand caused stockpiles to swell.
Output in April dropped 3.4 percent from a year ago to 40.09 million metric tons, while shipments during the month fell 2.5 percent to 42.45 million, Kolkata-based Coal India said in a stock exchange filing. Production and shipments were the lowest since September and dropped from the previous year for the first time since January 2015.
Production tumbled 32 percent from a record in March, when it reaches its annual peak as producers rush to meet targets. Output then hits a seasonal low around July as monsoon rains hinder production.
State-run Coal India’s production has outpaced the nation’s demand for the fuel over the past year as cheaper imports threaten to lure its customers. That has spurred buyer-friendly marketing policies at the state-owned miner, which controls more than 80 percent of the nation’s production.
Lower production and shipments were not necessarily an “ominous sign” and could help “reduce inventory and oversupply,” Pritesh Jani, an analyst at Mumbai-based Religare Capital Markets Ltd., said in e-mailed comments.
Coal stockpiles at the company’s mines had risen to almost 58 million tons as of April 1 because of lower off take by power utilities, federal coal and power minister Piyush Goyal informed lawmakers last month.
Coal India dropped 3.3 percent to 279.15 rupees, its biggest decline in a month, at the close in Mumbai.