Indian Oil Corporation Ltd. (IOC), the country’s second-largest producer of petroleum coke, conducted an online auction of pet coke from its Paradip refinery in Odisha on Tuesday, 13 Aug’19, wherein the offered quantity was 60,000 MT.
Notably, it is reported that no bid was received in this auction from the participants, although the reserve price of INR 5,160/MT – declared during the live auction – has remained unchanged over the last three auctions held in the previous month of July.
In the first auction of July, conducted on the 11th, the entire quantity of 50,000MT was sold at a higher bid of INR 5,700/MT, against a reserve price of INR 5,160/MT, an increase of INR 540/MT.
In the second auction of July, conducted on the 24th for 30,000MT, the entire quantity was sold at a bid price of INR 5,160/MT, which was same as the reserve price.
In the current auction, however, conducted on the 13th of this month, no bid was received.
It is understood that continuous price reduction of pet coke in the international market throughout several weeks and lower demand by major cement industries during monsoon are the primary reasons for such poor response.
Market participants indicated that the reserve price was higher by approximately INR 400-500/MT. IOC has maintained the reserve price in this auction as compared to general price reduction by Reliance Industries of INR 200/MT w.e.f. 1 Aug’19.
It would be interesting to watch how soon IOC goes for its next round of auction and what reserve price is fixed in that auction.
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