Bharat Coking Coal Ltd (BCCL) witnessed robust demand in the recently-concluded spot auction, as supply concerns helped the company attain higher price realization for its coal sales.
Offered volume in the series of auctions held on 14 and 15 Jan’22 was 211,000 tonnes (t), of which 138,750 t were booked at an average price of INR 5,816/t, garnering a premium of 98% over the assessed notified price of INR 2,942/t. In Dec’21, the premium was recorded at 80%.
Aggressive bidding was supported by the lesser quantity being offered in the auction. Notably, coal volume put on sale for Jan’22 was the lowest seen in the past eight months.
In view of the acute shortage faced by the power plants, supplies to the power sector were increased. However, with subdued growth seen in production levels, the company’s dispatches comprised surplus inventory available at the mines.
Consequently, coal stocks at mines fell to an alarming level of 0.92 mn t at the end of Dec’21 compared to 3.1 mn t in Dec’20, thereby compelling the company to lower its offering in these auctions.
Higher preference for raw coal
Out the total offered volume in the latest auction, only 66% of the material was booked primarily due to the subdued interest shown by the buyers for the coal by-products.
The company had offered 151,000 t of coal under coal by-products which include slurry, rejects and washed coal, of which only 79,750 t were sold. In contrast, almost the entire quantity offered for raw coal was sold out at a higher bid price than the by-products.
Quantity in t | Prices in INR/t
Under the raw coal category, W-III was sold at a bid price of INR 8,326/t, registering a premium of 132% over the notified price. W-IV, the coal grade ranking below W-III, managed a superior bid price of INR 8,886/t.
Price realization for both these grades was in excess of INR 1,200/t comparable to the levels seen in the previous month’s auction. The uptrend in prices is expected to continue due to the shortfall in domestic supply at a time imported coal prices are also soaring.
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