Coal India’s major coal producing subsidiary, South Eastern Coalfields Ltd (SECL), witnessed a sale of 66% of the coal quantity offered in spot auction concluded on 13 Jul ’20. The company had put forward 1,577,880 t coal for sale, out of which 1,007,500 t was booked.
A better performance was observed in terms of percentage allocation from the previous term, wherein out of the bulk 5,319,000 t coal offered in Jun ’20, only 16% of the material was sold. But, no major appreciable recovery was seen in the coal offers, as apart from the higher grades, the remaining volume was procured with ease at the base price.
| Grade | Quantity Offered | Quantity Booked | Reserve Price | Avg Bid Price | Premium |
| SC-II | 77,880 | 0 | 2796 | No Bid | – |
| G5 | 45,000 | 45,000 | 2737 | 2791.74 | 2% |
| G6 | 53,000 | 11,800 | 2524 | 2524.08 | 0% |
| G7 | 107,000 | 29,050 | 2311 | 2421.19 | 5% |
| G8 | 105,000 | 105,000 | 1757 | 1927.37 | 10% |
| G9 | 10,000 | 4,650 | 1368 | 1368.22 | 0% |
| G11 | 650,000 | 358,700 | 1145 | 1176.45 | 3% |
| G12 | 100,000 | 100,000 | 1063 | 1066.00 | 0% |
| G13 | 100,000 | 95,050 | 980 | 980.00 | 0% |
| G14 | 100,000 | 100,000 | 897 | 897.10 | 0% |
| G15 | 30,000 | 18,000 | 708 | 708.00 | 0% |
| G16 | 200,000 | 140,250 | 604 | 604.00 | 0% |
| Total | 1,577,880 | 1,007,500 | 1199.25 | 1234.14 | 3% |
Source: CoalMint Research
Quantity in t
Prices in INR/t
Incidentally, the premium received for the sold quantity dropped from 13% in Jun’20 to 3% in the latest round of auction.
Key inferences from the auction:
(a) Coal in recent sales was put across in 20 lots that comprise 397,880 t from grades lying in the upper GCV range (G5 to G9) including 77,880 t of semi coking coal offered via rail mode of dispatch. Remaining quantity fit in to the lower grades of coal (G11 to G16).
(b)Better price realization was fetched for coal in the upper GCV range, whilelower grade coal had received superior percentage allocation in the auction.No bids were reserve for the lot of coking coal offered from Katora siding. (Detailed source-wise list can be seen here).
(c) G5 grade of coal offered from Rajgamar colliery received highest bid price of INR 2921/t in the auction against reserve price of INR 2737/t. However, highest premium of INR 457/t over the reserve price was recorded for G7 coal offered from Singhali colliery.
(d) Relatively inferior bids from other collieries lowered the overall gain in premium over the reserve price for G5 and G7 grades. But that was not the case with G8 coal, which managed a 10% rise in premium with the collieries bearing the grade fetching bids in excess of INR 166-264/t over the base price.
Drastic fall in production:
In order to deal with excessive coal stock at its mines, SECL has substantially reduced its coal production in the current fiscal. Total output till 19 Jul ’20 has fallen 18% to 33.3 mn t against the volume attained in the corresponding period of previous fiscal.
Moreover, the company’s production was recorded 5.93 mn t lower than the highest production of 39.23 mn t attained by MCL in the period.
As on 19 Jul ’20, coal stock at SECL was assessed at 14.54 mn t as against 4.72 mn t in the year-ago period.
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