National Coal Index (NCI) Decline
- NCI declined by 3.48% in June 2024, standing at 142.13 points.
- Previous NCI value in June 2023 was 147.25 points.
- The decline suggests adequate coal availability at lower prices in the domestic market.
Coal Auction Premium
- The premium on coal auctions, which reflects industry conditions, has sharply decreased.
- This confirms sufficient coal availability in the market.
Coal Production Growth
- Coal production in India rose by 14.58% year-on-year in June 2024.
- Total production reached 84.71 million tonnes (mt) in June 2024, up from 73.93 mt in June 2023.
Market Implications
- The NCI's downward trend indicates a balanced market with improved supply and demand dynamics.
- With ample coal availability, India can meet growing demands and support long-term energy needs.
Industry and Energy Security:
- The increase in coal production contributes to national energy security.
- The stability in supply strengthens the coal industry and supports a sustainable and prosperous future.
National Coal Index
-The concept and design of the Index have been developed by the Indian Statistical Institute, Kolkata.
-NCI is a price index combining the prices of coal from all the sales channels- Notified Prices, Auction Prices, and Import Prices.
-The majority of coal is sold through the Notified Prices. For Non-Coking Coal, CIL fixes notified prices for each grade.
-There is price discrimination as to the Regulated Sector and Non- Regulated Sector (NRS).
-The NCI is used to determine the Premium (on a per tonne basis) or Revenue Share (on a percentage basis) based on a market-based mechanism.
-The Index is meant to encompass all transactions of raw coal in the Indian market.
*This includes coking and non-coking of various grades transacted in the regulated (power and fertilizer) and non-regulated sectors.