India’s National Coal Index (NCI) has showed an increase of 3.83 points to 143.91 for the month of September 2023. In August, National Coal Index stood at 140.08. This boost was the first since April 2023 on account of a temporary rise of coal prices in global markets.
The NCI is used to determine the premium on a per tonnes basis or revenue share (on a percentage basis) based on a market-based mechanism. The National Coal Index had been rolled out on June 4, 2020 by the Ministry of Coal and it is a price index which reflects the change in price of coal in a particular month relative to the fixed base year. 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. National Coal Index for coking coal stood at 153.31 in September, while for non- coking coal stands at 140.64 in September as compared to 137.70 in August.
The National Coal Index combines coal prices from all sales channels, including notified prices, auction prices and import prices. The NCI’s upward movement indicates rising demand of coal because of upcoming festive season and winter season, which will encourage coal producer to take maximum benefit by further scaling-up domestic coal production to meet the growing energy demands. However, the downward trend in the NCI signifies a more balanced market, aligning supply and demand.
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