South Eastern Coalfields Ltd (SECL) registered a fall in bid prices at its November special forward auction, on account of improved coal supplies.
These auctions, meant only for the power producers, had earlier witnessed aggressive bidding in view of the acute coal shortage they were facing. However, with gradual build-up in coal inventory, there is now lesser urgency from the buyers.
In the latest auction, held on 2 Nov’21, out of the 1.14 mn t offered for sale, 1.12 mn t was sold at a price realisation of INR 1,277.9/tonne (t), garnering a premium of 64% over the notified price of INR 778.64/t.
In contrast, the special forward auction held in Oct’21 was sold out, where the entire 1.15 mn t was booked at a price of INR 1,827.91/t, registering a gain of 174% over the notified price of INR 666.26/t.
In order to pull the plants out of criticality, SECL had stepped up its coal supplies via rail mode by dispatching 41.5 rakes/day in Oct’21 against 33.5 rakes/day in Sept’21.
As a result, stockpiles at the plants located in the western region improved to 4.44 mn t as on 5 Nov’21 compared to 2.8 mn t seen in the corresponding period in Oct’21.
Grade-wise coal prices
SECL had offered varied sets of coal grades in the special forward auctions held in the past two months. However, there was a vast difference in the bid prices for the grades which were common to both the months.
Notably, the bid price for G12 decreased 67% m-o-m to INR 1,616.48/t in the auction held in Nov’21, compared to INR 4,929.4/t in Oct’21, indicating a steep fall in demand for coal procured via the auction route in the current month.
Summary of auction held in Nov’21
Quantity in Metric Tonne (t) | Prices in INR/t
Greater preference was seen for high calorific value (CV) coal. Except for G7, G8-G12 received premium in excess of INR 500/t, contrary to the low CV grades in the G13-G16 band which were sold close to the reserve price.
In fact, G9 fetched a premium of INR 760/t over the reserve price which was the highest in the lot. But, the gain in the premium was significantly reduced for the low CV grades.
Outlook
While the situation at the power plants has been addressed to an extent, the non-power sector still awaits resumption of normal supplies from SECL.
The company is yet to conduct any spot auction for the month, and in the absence of any fresh sales these end-user industries would be compelled to opt for costlier imports to continue their operations.
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