MCL’s coal allocation in spot auction up by 70% m-o-m in Jul ’20

Mahanadi Coalfields Ltd (MCL) has registered a remarkable growth in allocation of coal via spot auction concluded on 15 Jul ’20.

The company managed to sell 1,791,250 t out of 3,290,000 t coal put up for sale in the recent auction, wherein allocated volume grew 70% on the month from 1,056,710 t booked in the auction held on Jun ’20.

Despite the higher allocation, subdued sales was recorded in terms of price realization for the sold quantity which dropped 4% m-o-m to INR 954.73/t in Jul ’20 compared with INR 990.5/t in Jun ’20. However, making advancement in terms of premium noted for the sale, the company fetched a gain of 4% over reserve price against nil premium recorded in the previous term.

Source: CoalMint Research
Quantity in t | Prices in INR/t

Source-wise allocation:

The company had offered total volume across its 20 collieries/sidings among which no bids were received for four lots. In contrast, there were six such lots which went unsold in the previous round.

Nevertheless, continual restrictions to contain the spread of COVID-19 failed to revive coal demand in the auction where almost two-third of the sold quantity was booked at the base price, with only a few lots witnessing noticeable bids against the reserve price. (Source-wise results can be seen here).

G12 coal grade offered from Spur V/VI sidings received highest premium of INR 64/t in the auction, which was sold at INR 1127/t. However, bid offers had come down from the prior auction where premium of INR 86/t was seen for the pertinent grade.

Upcoming auction: In order to deal with surplus coal stock, MCL has planned another round of spot auction during the month. The auction for sale of 850,000 t coal involving G8, G13 and G14 grades would be held on 28 Jul ’20.