SECL concludes two auctions for extended coal supplies

South Eastern Coalfields Ltd (SECL), the largest coal producing subsidiary of CIL, has recently concluded exclusive and special forward auctions for specific consumers, that allow a little longer validity for coal lifting than the traditional spot auction.

In order to deal with excess coal stock at its mines, the company has substantially raised the coal volume offered via auction route.

Evidently, the total quantity of 15.38 mn t put across these two auctions in the first quarter of FY21 (Apr-Jun’20) has already surpassed the combined quantity of 15.33 mn t that was offered during FY20 (Apr’19-Mar’20).

However, dull market conditions have failed to bring out any drastic improvement in the outcome of these auctions, which received sluggish response among buyers. Detailed result of the auctions has been elaborated below.

1. Special forward auction

The auction specially dedicated to power producers was held on 22 Jun’20 offering 3,446,190 t coal for three months period (Jun-Aug’20).

It is pertinent to note that offered quantity was rolled over from the previous term, after no bids were received in the auction held on 22 May’20. Further to facilitate coal movement via these auctions, the company resorted to road-mode of dispatch, with bulk of 3,894 t coal carried in a single rake.

But, no major recovery was seen in the buying activity as only 6% of the material was booked. In other words, out of 885 rakes put forward in the auction, only 51 rakes were procured by the buyers at the reserve price of INR 955/t set for the power sector.

Quantity in t
Prices in INR/t

2. Exclusive auction

The auction specially marked for non-power sector, garnered comparatively better response than the one conducted for power sector.

Coal quantity of 1,654,950 t was offered for sale conducted on 20 Jun’20 for three months period, which took into account the residual quantity from the previous term.

Incidentally, same grade of coal from the respective railway sidings was offered in the auction, wherein 23% of the material was booked at the base price of INR 1145/t set for non-power sector.

Quantity in t
Prices in INR/t

Upcoming auction

Rounding off the month involving a series of auction being conducted to liquidate surplus stock, SECL is set to carry out another round of spot auction for sale sale of 1,522,880 t coal on 29 Jun’20.