Coal India Ltd.’s shipments in April slumped 25.5% from a year earlier after more than a month-long nationwide lockdown halted economic activity, eroding demand for India’s most dominant energy 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% to 40.4 million tons.
Global coal demand is heading for its biggest annual drop since World War II with burning the fuel to make 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 about a quarter, affecting the use of coal and causing inventories to swell to record levels.z
India extended the stay-at-home restrictions for most parts of the country for another two weeks starting May 4.
“Coal India’s output is expected to remain muted until demand starts picking up,” Rupesh Sankhe, an analyst at Elara Capital India Pvt. in Mumbai, said before the company reported the data. “It will probably look at new customers, especially those that depend on imported coal, to shore up shipments.”
Despite the demand for the fuel crashing, the miner has set a higher output and shipments target for the fiscal year that began April 1 on expectations of a revival after the lockdown is lifted, coal minister Pralhad Joshi said last week.