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Photographer: Dhiraj Singh/Bloomberg Photographer: Dhiraj Singh/Bloomberg

Coal India Ltd. reported a year-on-year production decline for the second straight month and an increase in shipments, reflecting attempts by the world’s biggest producer to cut inventories.

Output fell 4.3 percent from a year earlier to 40.74 million metric tons, the lowest in three years for the month of May, the company said in a stock-exchange filing. Shipments rose 1.9 percent to 46.4 million tons.

Kolkata-based Coal India will focus on liquidating stockpiles for a few months, Chairman Sutirtha Bhattacharya, said last month. The company will be counting on higher demand from power plants, its biggest customers, to start growing.

“Production will remain under pressure for some more time because of subdued demand and high inventory,” said Goutam Chakraborty, an analyst at Emkay Global Pvt. in Mumbai. “A recovery is possible if power plants start restocking after the monsoons.”

Inventories at Coal India rose 19 percent during the year ended March 31 to 68.6 million metric tons, Coal Minister Piyush Goyal told lawmakers in April. The company is targeting to bring it below 40 million tons, according to Bhattacharya.

— With assistance by Debjit Chakraborty