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NEW DELHI: The National Coal Price Index (NCI) fell 17.5% to 155 points in November 2023 from a year ago, indicating cheaper fuel for sectors such as cement and steel as well as power plants importing coal for blending as a result of a sharp uptick in domestic production.
The drop in the index reflects sufficient availability of coal in the market on the back of a sharp uptick in domestic production. Coal production grew nearly 15% to over 893 million tonne in 2022-23 and is expected to top a billion tonne by March.
Rising domestic supplies mainly impact the premium in Coal India Ltd’s auctions that are a key source of domestic fuel, which costs less than imports, for non-regulated industries. Coal prices for power generation are fixed by the government.
“Due to availability of domestic coal, sectors such as cement, steel etc and power plants using imported coal for blending with domestic fuel will see reduction in costs. In case of power, however, the decision to reduce tariffs rests with the sectoral regulators,” a senior coal ministry official said.
A ministry statement on Wednesday pegged the November NCI at 155 points against 188 a year ago. NCI for non-coking coal stood at 143.5 points, reflecting a decline of 25%. The index had hit its peak in June 2022 at 238.8 points.
The downward trend signifies a more balanced market with sufficient coal availability, which will allow the country to support long-term energy requirement for building a resilient and sustainable coal industry to fuel economic growth, the ministry said.
NCI combines prices of coal sold through all channels and including by Coal India Ltd at notified rates, auction and imports to provide reliable indication of market dynamics and insights into price fluctuations. It considers 2017-18 as the base year.
The drop in the index reflects sufficient availability of coal in the market on the back of a sharp uptick in domestic production. Coal production grew nearly 15% to over 893 million tonne in 2022-23 and is expected to top a billion tonne by March.
Rising domestic supplies mainly impact the premium in Coal India Ltd’s auctions that are a key source of domestic fuel, which costs less than imports, for non-regulated industries. Coal prices for power generation are fixed by the government.
“Due to availability of domestic coal, sectors such as cement, steel etc and power plants using imported coal for blending with domestic fuel will see reduction in costs. In case of power, however, the decision to reduce tariffs rests with the sectoral regulators,” a senior coal ministry official said.
A ministry statement on Wednesday pegged the November NCI at 155 points against 188 a year ago. NCI for non-coking coal stood at 143.5 points, reflecting a decline of 25%. The index had hit its peak in June 2022 at 238.8 points.
The downward trend signifies a more balanced market with sufficient coal availability, which will allow the country to support long-term energy requirement for building a resilient and sustainable coal industry to fuel economic growth, the ministry said.
NCI combines prices of coal sold through all channels and including by Coal India Ltd at notified rates, auction and imports to provide reliable indication of market dynamics and insights into price fluctuations. It considers 2017-18 as the base year.
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