Central Coalfield Ltd (CCL) has witnessed a decent response for coal sales conducted under spot auctions, held on 12 and 13 Jun’20.
The company had fetched price realization of INR 2206.02/t for the sold quantity, which was 57% higher than the average base price of INR 1408.63/t assessed in the auction. However, the auction remained weak in terms of coal allocation, wherein the total quantity sold fell 25% to 556,170 t against 745,670 t recorded in the spot sales held in Apr’20.
| Product | Grade | Quantity | Price | ||
| Offer | Booked | Reserve | Avg Bid | ||
| Coking Coal | W-III | 70,000 | 70,000 | 3020.00 | 3815.27 |
| W-IV | 225,000 | 120,670 | 2535.00 | 3037.86 | |
| W-V | 70,000 | 30,000 | 2261.00 | 2617.42 | |
| Non-Coking Coal | G6 | 19,000 | 19,000 | 2524.00 | 3817.26 |
| G7 | 2,000 | 0 | 2311.00 | N/A | |
| G8 | 37,000 | 37,000 | 1757.00 | 2852.18 | |
| G9 | 253,000 | 7,500 | 1368.00 | 1528.31 | |
| G11 | 510,000 | 183,250 | 1145.00 | 1145.25 | |
| G12 | 1,000,000 | 66,700 | 1063.00 | 1063.00 | |
| G13 | 25,000 | 9,450 | 980.00 | 980.42 | |
| Washed Coal | G4 | 8,000 | 2,700 | 3000.00 | 3000.00 |
| G5 | 20,000 | 9,900 | 2737.00 | 2737.00 | |
| Total | 2,239,000 | 556,170 | 1408.63 | 2206.02 | |
Source: CoalMint Research
Quantity in metric tonne (t)
Prices in INR/t
It is pertinent to note that no spot auction was held during May’20, in a period where exclusive auction for non-power sector was envisaged. Nonetheless, the auction failed to revive sales as only 2% of the offered coal was lifted. In addition, due to subdued demand, 11 out of 14 lots carrying coal quantities were left unsold.
Key inferences drawn from the spot auction result:
(a) Bidders strongly preferred procurement of higher grades coal in the auction. Notably, volume of coking coal and superior grade of non-coking coal (up to G8) accounted a sale percentage of 65%.
While among the remaining grades, 15% of the material out of the offered 1,816,000 t was sold.
(b) Fall in premium: Bids received for W-III grade coal were the highest among the lot, but a difference of INR 630-670/t was noted in offers for Sel Dhori and Parej collieries from the previous spot auction. (Detailed source-wise results can be seen here).
In case of W-IV coal grade, for which average bid of INR 3037.86/t had been recorded, offers had come down 17% from previous auction . In fact, the sale of coal from Jharkhand OC (Open Cast Project) fetched highest premium of INR 1692.47/t over the reserve price in the latest auction. But, comparatively lower bids from remaining sources resulted in overall reduced final bid prices.
Similarly, a decline in premium was received against the reserve price was noticed for non-coking grades (excluding washed coal), as we move down the order.
Incidentally, G6 coal had received average bid price of INR 3817.26/t, fetching a premium of INR 1293.26/t over the reserve price, while the bids receded for sale of G8 and G9 grades. Apparently, no bids were received for G7 coal, while lower grades were sold almost at the base price.
(c) Subdued response for dispatch via road: The company had proposed sales of bulk coal through rail mode of dispatch in its latest auction. However, it received a tepid response as out of 55 rakes put forward only four were booked, that too at the base price. Moreover, no bids were received for coal offered from Dhori-I and Rajrappa (W) collieries.
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