CIL hikes thermal coal prices for the first time in over five years Report

Insight 08 June 2023

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Report summary

Coal India Ltd (CIL) rationalised its thermal coal prices for the first time in over five years. CIL is India’s largest coal producer and meets 80% of India’s domestic coal demand. As such, CIL’s policies have a significant influence on the Indian economy, which prevents the company from increasing coal prices frequently. In the latest revision, the prices were hiked only for high-medium calorific value (CV) coal, whereas lower CV coal prices were left unchanged. The price revision came into effect on 31 May 2023. In this insight, we explore the following: • What is the rationale and the significance of the price hike? • How do CIL’s coal prices compare to other domestic producers? • What will be the impact of the revision on CIL’s bottom line? • How will the price hike impact different coal consumers? • Will there be any effect on seaborne coal demand?

Executive summary
Prices were hiked only for high to mid-CV coal, whereas low-CV coal prices were left untouched
Unlike CIL, Singareni Collieries Company Ltd (SCCL) revises its coal prices frequently
The impact of the price hike will be marginal for the power sector