Coal India April shipments fall 25.5% as lockdown erodes demand

Coal India’s shipments in April slumped 25.5 percent from a year earlier after greater than a month-long nationwide lockdown halted financial activity, eroding demand for India’s most dominant power source.

Shipments dropped to 39.1 million tons in the month, the Kolkata-based miner said in a filing late Friday. Output declined 10.9 percent to 40.4 million tons.

Global coal demand is at risk of its biggest gross annual drop since World War II with burning the fuel to create electricity becoming unprofitable and socially untenable in several countries. The pandemic has only served to hasten its demise. The lockdown in India has shut factories and offices slashing electricity demand by in regards to a quarter, affecting the utilization of coal and leading to inventories to swell to record levels.z

India extended the stay-at-home restrictions for some parts of the country for another fourteen days starting May 4.

“Coal India’s output is likely to remain muted until demand starts picking right up,” Rupesh Sankhe, an analyst at Elara Capital India in Mumbai, stated before the company reported the data. “It'll probably look at clients, especially those that rely upon imported coal, to shore up shipments.”

Despite the demand for the fuel crashing, the miner has set an increased output and shipments target for the fiscal year that started out April 1 on expectations of a revival following the lockdown is lifted, coal minister Pralhad Joshi said the other day.