While coal demand in Central India is returning to pre-COVID level, eastern part of the country has not shown encouraging sign of progress as indicated in the recently concluded spot auction by Central Coalfields Ltd (CCL).
The company has been the second-best performer among CIL subsidiaries after ECL in terms of premium received against notified price. However, bid prices have begun to retreat in the past two months.
In the latest round of sales held on 6 Jan ’21 wherein 3,235,000 t coal was offered, only 341,500 t was sold at a premium of 29% over notified price. In contrast, coal allocation of 723,000 t in the previous term was booked at a premium of 31%.
Key findings:
Out of 18 different lots, interest came in for coal pertaining to 8 collieries amongst which aggressive bidding was seen for two of these. (Detailed source-wise result can be seen here).
Superior coal grade G7 in the list garnered highest bid price of INR 5085/t, thus fetching gain of INR 2534/t over the reserve price. But, no such outcome was noted for bulk booking of G8 coal grade offered via rail-mode from Saunda colliery.
Remaining lots of non-coking coal apart from Rohini were booked almost at the base price.
Coke manufacturers in the region were largely silent after their heavy involvement in the previous round of auction. Evidently, keeping aside sale of W-V grade from Jarangdih PF-I, no bids were recorded for other lots of coking coal.
After a series of decline recorded in global coking coal market, prices have strengthened this month. As per CoalMint’s assessment, Australian premium HCC has gone up by $10.5/t w-o-w to $123/t on FoB basis.
CCL has been offering bulk volume over the past couple of months, added to it inclusion of adequate quality of coal could help the company to expand its sales volume taking advantage of the rise in price disparity over imported grade.
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