Core signals: Coal output growth at six-month low in December

India’s coal output growth slid to a six-month low of 10.75% in December 2023, with production levels nearing 93 million tonnes (MT), as per data released by the Coal ministry on Tuesday.

India’s coal output growth slid to a six-month low of 10.75% in December 2023, with production levels nearing 93 million tonnes (MT), as per data released by the Coal ministry on Tuesday.

Coal has a weightage of over 10% in the Index of Core Industries, which had slid to the lowest levels since March 2023 in November, with the growth rate slipping to a six-month low of 7.8%. The eight core sectors, which constitute a little over 40% of the Index of Industrial Production or IIP, had grown 12% in October, when the IIP jumped at a 16-month high pace of 11.7%.

The National Statistical Office will release November’s IIP numbers on January 12 and economists expect industrial output growth to have eased to around 7%-8% from October’s surge.

Core sectors’ growth is also expected to slow between December 2023 and February 2024, owing to base effects from the previous year and the coal sector numbers for December back this expectation.

Coal dispatches from mine pitheads to end-users stood at 86.23 MT in December, growing at a milder rate of 8.36% compared to 9% in November. The broadest end-use sector for coal, electricity generation, had seen growth slow from 20.3% in October to a five-month low of 5.6% in November, with power output at its lowest level since March 2023.

Despite the slower year-on-year growth, December’s coal dispatch numbers are 5.6% over November and suggest that electricity generation, which has a nearly 20% weightage in the core sectors’ index, may have bounced back somewhat last month.