Coal India Ltd’s coal allocation via auction route has witnessed steep growth during Dec ’20 on the back of higher volume being offered in sale conducted for extended period of dispatch.
Sales volume under e-auctions increased 40% on the month to 13.1 mn t in Dec ’20 compared with 9.36 mn t in Nov ’20, with almost 57% booking recorded in the special forward and exclusive auction schemes. (Detailed auction summary can be seen here).
CIL subsidiaries except WCL were seen aggressively offering coal under these auctions for power and non-power customers, as sales resumed after a barren month. However, lower allocation remained a concern as booking against offered quantity in the two auctions was 14% and 20% respectively.
Unstructured coal market composed of consumers and traders having no direct access for purchase of coal has shown healthy appetite in volume bookings.
Although allocation of 19% coal against the offered quantity in Dec ’20 came down from the levels seen in the previous month, spot and special spot auction for ‘coal importers’ both had recorded higher percentage allocation than the auctions envisaged for end-user customers.
On the other hand, no coal was offered in the ‘original’ special spot auction for the second consecutive month.
Fall in price realization:
Despite signs of revival in economic activities, coal allocation for e-auctions is more than present demand, which has affected price realization for the sales.
Coal during the month was booked at an average price of INR 1730.82/t, down 8% m-o-m from INR 1891.19/t in Nov ’20. Moreover, after attaining a fiscal-high premium of 30% over notified price in Nov ’20, the gain was reduced to 25% in December auction sales.
Recent amendment regarding introduction of minimum bid price could further dampen CIL’s plans to expand sales in e-auctions at a time when demand from power sector has slowed down on arrival of winter season.
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