What is National Coal Index?

About National Coal Index (NCI):

• The NCI is a price index which reflects the change in the price level of coal in a particular month relative to the fixed base year.
• NCI combines the prices of coal from all the sales channels-Notified Prices, Auction Prices, and Import Prices.
• It has been rolled out on 4th June 2020, and the aim is to have an index that will truly reflect the market price.
• The concept and design of the index as well as the representative prices have been developed by the Indian Statistical Institute, Kolkata.
• It is released every month by the Ministry of Coal.
• The base year is FY 2017-18.
• 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.
  • Washed coal and coal products are not included.
• The NCI's upward movement indicates rising demand for coal, which will encourage coal producers to take maximum benefit by further scaling-up domestic coal production to meet the growing energy demands.
• The downward trajectory of the NCI signifies a more equitable market, harmonizing supply and demand dynamics.

Q1: What is Coal?

Coal is a sedimentary deposit composed predominantly of carbon that is readily combustible. Coal is black or brownish-black, and has a composition that (including inherent moisture) consists of more than 50 percent by weight and more than 70 percent by volume of carbonaceous material. It is formed from plant remains that have been compacted, hardened, chemically altered, and metamorphosed by heat and pressure over geologic time.

Source: National Coal Index declines 3.48% in June 2024