Coal India, world’s largest Coal producer with an annual production of over 460 MnT, is planning to raise prices by 10%. The company is likely to reduce e-auction quantity by 50% for ensuring optimum availability to power plants.
In the last CIL’s board meeting, a discussion was held to reduce the e-auction quantity by 50% as directed by the Coal Ministry. However, the board is yet to take the decision. In the meeting, the board said that if there will be reduction in e-auction quantity by 50%, Coal prices will be rationalize.
Indian Sponge Iron Manufacturers seek Imported Coal
Indian Sponge iron manufacturers, which contribute around 3%total sales of CIL, are struggling with Coal supply crunch and price hike in domestic market. It was noticed that demand for imported Coal has increased significantly in last few months.
Rise in auction prices for domestic Coal and reduced Coal linkage for Sponge iron manufacturers have forced them to go for import.
- Total estimated Coal requirement from Sponge iron industry is expected at around 35-36 MnT
- South African RB-2 offers at USD 75-76/MT CNF for September deliveries at Gangavaram port
- Australian origin offer at USD 80/MT CNF Dhamra port
- Imported Coal FC range is from 47-55% compared to domestic Coal of 28-35%
A capsize vessel from South Africa’s Richard bay is expected to arrive at Gangavaram port in the mid of August. Current offers for South African RB2 are in the range of about USD 75-76/MT CNF with 53% FC. Landed cost including customs duty and handling charges at port will be at around INR 5,300-5,400/MT in Gangavaram port for September delivery.
South African RB1 offers at USD 83-84/MT CNF with Fixed carbon of 57% and RB3 at INR 69-70/MT CNF with 46% FC at Gangavaram port.
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