Bharat Coking Coal Ltd (BCCL), the major coking coal producer in the country, has witnessed improved sales in the spot auctions held in Jun ’21.
Indicating a gradual revival in demand, a buying spree was noticed despite the coal being offered at higher reserve price. In the current month’s auctions, the reserve coal price was increased from 10% to 35% over the notified price across various grades.
The company offered 1,210,031 tonnes (t) of coal via the spot auction on 18-19 Jun ’21 of which 87,800 t was sold at a bid price of INR 2,120.49/t, garnering a premium of 30% over the notified price of INR 1,625.72/t. In contrast, the premium over the notified coal price was assessed at 15% in the previous month’s auction.
Lower sales a concern
Coal allocations in Jun ’21 increased 77% m-o-m from 49,500 t in May ’21, but lower sales against the offered volumes remained a concern as majority of the coal by-products put on sale were left unsold.
Moreover, bulk of the raw coal offered via rail mode for W-IV and W-V grades had failed to garner active response from the bidders.
Nevertheless, better price realisation was seen for raw coal products compared to the coal by-products which were booked at the base price. Interestingly, the standalone bid price for raw coal was assessed at INR 4,792.97/t, which was 44% higher than the assessed notified price of INR 3,332.16/t.
Among the raw coal products, the highest bid price of INR 6,011/t was noted for W-II coal which had failed to incite a single bid in the previous auction despite being offered at a lower reserve price. Similar response was also seen for the remaining coal grades, which saw an uptick in bid prices compared to the previous month’s sale.
During the first two months of FY ’22, BCCL recorded a robust growth of 129% y-o-y in coal dispatches to 5.2 mn t. Stimulated by increased activity and higher coal consumption at power stations, the company is expected to maintain higher coal supply, going forward.
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