Experts said if the trend continued till the middle of the year, coal company balance sheets may not remain as rosy as they are now.

Near monopoly coal producer Coal India Limited (CIL), which alone accounts for 89 per cent of the industry output, and joint sector Singareni Collieries Company Limited (SCCL) have been able to improve their earnings since March 1996, when coal prices were partially decontrolled. The gliding demand for coal and piling stocks are now sure indicators that the coal market would not accept any more premium on the prevailing price.

Coal India's sales have dropped by two million tonnes in the first quarter of this year to 82.5 million tonnes, compared with 84.5 million tonnes in the first three months of the 1997-98 fiscal. Singareni Collieries Company Limited, a joint venture between the centre and the Andhra Pradesh government, soldnearly a million tonnes less coal between April and June this year. Singareni Colliery Company's coal despatches were 7.5 million tonne in the first three months of this fiscal, compared to 8.7 million tonne in the first quarter of last year. The total despatches from the coal companies slid by nearly five per cent to 61.32 million tonne in the first quarter, from 64.38 million tonne in the first three months of the 1997-98 fiscal. The unsold vendible stocks of the industry sprang to 25 million tonne and triggered alarm bells among the coal companies. In reality, the stocks are not more alarming than the March inventory of 28.9 million tonne, which was marginally higher than the March 1997 stocks of 28.6 million tonne and considerably lower than the March 1996 stocks of 30.4 million tonne. The real cause for concern was the industry's prime customer, the power utilities.

Power plants, which usually buy up 72 per cent of the country's total coal output of roughly 296 million tonne, have shown signs of lossof appetite since late last year. In April power plants had record coal stocks of 17 million tonne and were refusing to buy any more.

By July the total offtake from power utilities rose to 45.27 million tonne, which was a million tonne less than in the first three months of last year and more than five million tonne short of the captive stocks coal companies are compelled to keep for power plants. Thermal power plants have linkages for 50.99 million tonne of coal in the first quarter alone. Industry sources say the power plants were the main culprits, but not the only ones.

Every sector, be it cement, steel or fertiliser, reduced offtakes of coal in the first quarter of the year. The demand for coal from cement plants dropped by 61 per cent to 1.3 million tonne, from 2.1 million tonne in the first three months of last year. Fertiliser plants lifted 28 per cent less coal between April and June this year, compared to the first quarter of the 1997-98 fiscal. The quarterly offtake of fertiliser units slid to0.78 million tonne from a million tonne last year. Steel plants bought only 4.4 million tonne of coal in the first three months of the fiscal, which was 4.5 per cent less than their first quarter offtake of 4.65 million tonne last year. The industry's only hope now, are its small customers, like brick kilns and ceramics and tile manufacturers, who have bought 10 million tonne of coal this year, compared to 9.6 million tonne in the first quarter of last year.