Bharat Coking Coal Ltd (BCCL), the mining arm of CIL operating in Jharkhand, has witnessed a spurt in coal demand for sale in spot auctions driven by renewed interest from the power sector.
The company managed to uplift allocation in the spot auctions carried on 10 and 12 Apr ’21, where 73,000 t coal was booked out of the total 103,500 t being offered for sale.
Although, the sales volume was meager in comparison to the previous auctions, this was the highest allocation in terms of quantity being offered in the past 7 months. Besides, an improvement was also registered in terms of coal pricing as the auction fetched gain of 22% over the notified coal price.
Surge in electricity demand has resulted in a subsequent fall in coal inventories thereby prompting the power plants to raise their booking in the e-auction.
Notably, coal stocks at plants located across Eastern region has come down to 6.83 mn t as on 24 Apr ’21 sufficient for 16 days of power generation. In the month-ago period, the stock level was assessed at 10.4 mn t sufficient for 31 days of generation.
Key findings:
(a) Overall, the coal was booked at an average bid price of INR 4148/t in the auction, thus reversing the declining trend seen in the past three months.
(b) In an encouraging sign, only a single lot failed to incite bidders out of the 26 lots from which the offered quantity was put in for sale. In contrast, 13 such lots went unsold in the auction held in the previous month. (Detailed auction summary can be seen here).
(c) Highest bid price of INR 4918/t was received for W-II grade from Jogidih colliery, but the coal was rather sold at a nominal premium of INR 20/t over reserve price.
Instead, stiff competition was recorded for the non-coking grades of coal offered from Dahibari colliery. In particular, G8 coal fetched gain of INR 1480/t over reserve price, which was the highest among the lot.
Elevated power demand is expected to offer the company a much needed boost in order to reduce some of the excess coal inventory in hand, which had risen to 3.8 mn t at the end of FY ’21.
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