Thermal Coal Inventories Drop to 34-Month Lows

Executive Summary Coal inventories at India’s thermal power plants contracted sharply, falling 42% year-on-year to 29 million tonnes (MT) in August 2026, per Crisil Intelligence. Average coal stock cover halved from 17 days to a 34-month low of nine days. Crucially, this depletion reflects a temporary logistical bottleneck rather than a structural supply deficit, driven by a mismatch between elevated electricity demand and coal evacuation constraints. Demand Dynamics & Logistical Constraints The drawdown stems from heightened coal-based power generation, which surged 13% amid an abnormally hot summer and a 13% monsoon deficit. Between April and August, thermal coal consumption rose 8% year-on-year to 395 MT, tracking a 9.5% increase in aggregate power demand. While pithead inventories at mining sites remain healthy and aligned with historical averages at 76 MT, transportation infrastructure lagged. Rake loading grew by just 5% and coal receipts at plants by 3%, compounded by heavy rains disrupting eastern coal belt rail evacuation. Asset Impact & Regional Vulnerability Inventory stress is heavily concentrated among domestic coal-dependent plants. In August, 51 of the country's 190 thermal plants reported critically low stocks, up from 20 last year. Regional vulnerabilities are highly pronounced: Rajasthan, Madhya Pradesh, and Andhra Pradesh saw 72%, 69%, and 60% of their coal-based generation capacities operating at critical levels. Strategic Outlook & Mitigation To alleviate logistical pressure, Coal India authorized plants with fuel supply agreements to supplement rail transit with road transport starting September 2026. Crisil projects stabilization in the second half of the fiscal year, forecasting power demand and coal consumption to grow at a normalized 6-7%. H2 power demand is estimated at 860-870 billion units, with thermal generation retaining a robust 65-70% share of the national energy mix.