Private power producers have alleged that upcoming coal auctions for stressed power plants is an attempt by Coal India to maximise profits as a state monopoly by exploiting the plight of fuel-starved projects.
Pressure from lenders and desperation for coal may force stressed projects to make aggressive bids at the coal auctions, they said. Also, there are high chances of these projects losing bank guarantees if there is no demand from discoms in two years, power producers said.
Responding to cost pressure and greater demand, domestic steel producers have raised prices by Rs 1,000-1,500 a tonne across products for January.
Iron ore miners have increased prices by Rs 600 per tonne and so this increases the cost of production by Rs 1,000 a tonne. Hence, steel producers have hiked prices, V R Sharma, managing director, Jindal Steel & Power (JSPL), told. With this, domestic steel players have raised prices for the fourth consecutive month in a market in which consumption is expected to pick up after the government announced a mega push for infrastructure projects.
Coal India posted the first decline in annual shipments in at least six years as demand from power producers weakened and its production was hit by heavy rains earlier in 2019. Shipments fell 3.8% in 2019 from a year ago to 580.8 million tonnes, according to Bloomberg calculations.
According to CIL, on a monthly basis, shipments rose 1.9% in December from last year to 53.63 million tons. Output climbed 7.2% to 58.02 million tonnes
Coal India Ltd , which registerted negative growth in production of the dry fuel for past few months, has posted over 7% growth in December with 58 million tonne output, sources said. CIL had produced 54.13 million tonne in corresponding month of 2018.
According to provisional data, CIL has produced 388.39 million tonne of coal during April-December period of the current fiscal, down by 5.83% from 412.45 million tonne in the first nine months of the last financial year, CIL sources told.
Jindal Steel and Power Ltd (JSPL) said its domestic production of crude steel and related products for the quarter ended December 31, 2019 stood at 1.61 million tonnes, up 22% from the year ago period. The company’s crude steel output had stood at 1.32 million tonnes in the corresponding period last year.
During the third quarter of FY20, JSPL recorded a growth of 30% in sales at 1.66 MT, as against 1.27 million tonnes a year-ago.