NEW DELHI, July 13: Coal supply to the steel sector has slumped in the first quarter of the current financial year following sluggish demand. During April-June, supply of coal to the steel sector by Coal India Limited fell to 1.77 million tonnes from 2.02 million tonnes during the same period last year, company sources said.

``Saleable steel did not move up last year as projected, resulting in piling up of huge stocks. This year most of the major producers have cut down the inventory of raw materials,'' the sources said.

According to joint secretary in the ministry of steel, NK Ragupathi, coal intake in the steel industry has gone down possibly because steel manufacturers are liquidating their built-up inventories.

The 12.38 per cent reduction in coal supply to the steel industry in the first quarter against a projected 2.24 million tonnes of coal by Coal India during the period.During 1996-97, the supply of coal to the steel sector had gone down to 34.8 million tonnes from the previous year's figure of 35.8 million tonnes.

The steel sector is the second largest user of coal in the country after power.Last year, the net profits of both the Steel Authority of India Limited and Tisco dipped substantially. The first half of the current fiscal has also not been particularly good.

Though SAIL increased its sales by seven per cent in the first quarter, its production went down by over nine per cent. Meanwhile, import of coking coal has also shown a declining trend in the recent past.

Copyright © 1997 Indian Express Newspapers (Bombay) Ltd.