Coal India shipments lag target at least 5th year

Bloomberg

Coal India Ltd., the world’s biggest miner of the fuel, missed annual production and shipment targets for at least the fifth year despite reporting record volumes for both.
Output grew 2.9 percent to 554.1 million tons during the year ended March, while shipments rose 1.6 percent 543.2 million tons, missing the target of 598.6 million tons for each, the Kolkata-based miner said in a stock exchange filing. Coal India has fallen short of its annual output goal every year since at least the 2013 fiscal year, according to data compiled by Bloomberg.
The miner also set monthly records in March. Production of 66.1 million tons was 12 percent higher than a year ago, while shipments rose 6.5 percent to 52.3 million tons, according to the company’s filing and Bloomberg calculations. Both increased year-on-year for a fifth straight month.
The surge in output and shipments last month highlights the recovery in demand from power plants gearing up for India’s peak demand season, which will fade when summer ends.
“There has been an improvement in shipments, still it’s far from matching the company’s mining potential,” said Goutam Chakraborty, an analyst at Emkay Global Financial Services. “The steep growth in March output will help meet the summer demand and offset some of the production losses the company might face during the monsoons. If it has to maintain this run rate, the demand has to grow at a stable pace through the year, not just in seasonal blips.”
Production usually slides during monsoon months of July, August and September as heavy rains flood mines and slow movement of coal trucks. Coal stockpiles at power plants, which consume about three-quarters of Coal India’s production, have risen almost 50 percent since November, according to the latest data from the power ministry’s Central Electricity Authority.
Rising inventories may damp purchases from power generators, Chakraborty said.
Power stations in the country remain under-utilized as they can’t find buyers for all the electricity they can produce. Coal-fired power plants reported 61.8 percent utilization in February, compared with 65.2 percent a year ago, CEA data show.