On July 26, the Ministry of Coal, Government of India, announced a significant drop of 33.8% in the National Coal Index (NCI) for May 2023, which stood at 157.7 points compared to 238.3 points in May 2022. This decline in coal prices is expected to have a positive impact on the energy sector, leading to reduced electricity bills, as well as lower prices for bricks, rods, and steel. The ministry's statement highlighted that the NCI serves as an essential price index, encompassing coal prices from all sales channels, such as notified pricing, auction prices, and import prices. It was established with the fiscal year 2017-18 as the base year and plays a crucial role in providing valuable insights into coal pricing fluctuations.

The decline in the NCI is significant in the current scenario and indicates a robust supply of coal in the market, capable of meeting the growing demands. Additionally, there has been an increase in coal auctions, signaling adequate availability of coal in the country. The NCI for non-coking coal also witnessed a substantial drop of 34.3% to 147.5 points in May. Non-coking coal, with higher ash content and lacking caking properties, is primarily used in thermal power plants for electricity generation. In the same period, the coking coal index declined by 32.6% to 187.1 points. Notably, the index's peak point was recorded at 238.8 points in June 2022.

The Indian coal industry is reported to have a substantial stock of coal, indicating consistent supply across various sectors dependent on coal, thereby contributing to India's overall energy security. The steep decline in the NCI suggests a balanced market, where supply and demand are well-aligned. With ample coal availability, the nation can effectively meet the increasing demand for fuel and provide support to industries, aiming for a resilient and sustainable coal industry.