(Bloomberg) -- Coal India Ltd.'s shipments touched a four-year low in the 12 months through March, after the pandemic crushed demand for the commodity.
The state-run miner sold 573.8 million tons of coal during the period, 1.3% less than a year earlier, according to a filing on Thursday. That reflects lower consumption as lockdowns brought industrial activity to a standstill. Inventories at power plants then expanded, weighing on Coal India's sales.
With the company's own inventories also at unsustainable levels, production declined as well as shipments, falling 1% to a three-year low of 596.2 million tons. The company accumulated a record 99 million tons of the fuel at its mines, it said in a separate statement.
To prop up sales, Coal India offered incentives to attract customers, especially those who usually imported the material. That helped replace 90 million tons of imports during the year, the Kolkata-based miner said.
There are signs that the stockpile is now beginning to clear, with Coal India's shipments in March rising 12% from a year earlier, while output declined 3.8%.
The situation may further improve with India's summer season around the corner. An increase in electricity use for cooling may force power plants to replenish dwindling inventories, aiding sales growth at Coal India, according to Elara Capital India Pvt. Vice President Rupesh Sankhe.
“We expect good growth in sales volumes this year because of last year's low base, as well as industrial demand recovery,” Sankhe said. “The immediate focus should be on liquidating the inventories though, and that could limit production growth in the next couple of months or so.”
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