BCCL’s spot auction receives overwhelming response in Sep ’20

Bharat Coking Coal Ltd (BCCL), the prime producer of coking coal in the country, has witnessed remarkable coal sales in its recent spot auction held on 16 Sep ’20.

The company had floated 37,900 t coal for sale, wherein except 400 t from New Akashkinaree colliery, entire volume was lifted by the buyers.

Price realization of INR 5098.3/t for the booked quantity fetched 45% premium over the assessed reserve price of INR 3511.01/t, but due to lower volume involved in the auction it had marginally come down from INR 5164/t recorded in the previous auction conducted on Jul ’20.

Grade-wise auction results:

Quantity in Metric Tonne (t) | Prices in INR/t

Highest bid price of INR 6635/t was recorded for W-III grade of coking coal from Phularitand, which managed a premium of INR 3053/t over the reserve price. However, comparatively lower bids seen across some of the lots lowered the gain in terms of premium received for the grade.

In contrast, bids in range of INR 1820-2300/t for the two lots offering W-IV coal grade yielded a better premium of 64% over the reserve price (Detailed source-wise result can be seen here).

Sale carried out for the sole lot of G7 grade of non-coking coal fetched bid price of INR 4645/t, which was 80% higher than the reserve price.

Domestic coking coal prices in auctions have recovered after being severely affected by COVID-19 led demand slump. Despite the recent uptick in bid prices, these maintain a price advantage over the imported grade from Australia assessed at INR 9373/t, as per government’s data.

BCCL’s coal stock was reported 2.45 mn t at the end of Aug ’20 rising 78% y-o-y from 1.38 mn t in Aug ’19. In order to reduce the excess inventory, the company had carried out another round of auction yesterday where 215,800 t coal was offered.

Given that economy is still under the process of recovery, these auctions are likely to attract positive response from the buyers.