South Eastern Coalfields Ltd’s (SECL’s) spot e-auction on 28 October fetched a bid premium of 275% over the notified price – a major downtrend compared to the last auction in August when the bid premium had touched 365%.
The premium represents the percentage increase in bids over the notified price assessed for various coal grades.
Bid prices fell on the back of improved offering in the auction, which was the highest since March this year.
Notably, the miner had offered 1.42 million tonnes (mnt) of non-coking coal, of which the entire quantity was booked. The grades on sale were in the range of G5 to G10, along with low-CV G13 and G15 coal.
The quantity of G15 grade was the highest at 900,000 t which was offered from the Baroud, Chhal and Jampali mines.
There were 381 participants in the auction that had placed a total of 38,429 offers of which 308 emerged as successful bidders.
Grade-wise analysis
- All the grades offered saw a drop in bid prices.
- The highest fall was recorded in the low-CV band consisting of G10, G13 and G15, from which the combined quantity on sale was in excess of 1 mnt.
- Among high-CV coal, the G5 grade saw the highest drop of 16% compared to the August auction.
Mine-wise analysis
- Only Vijay West received bid values above INR 10,000/t. In contrast, only three mines – Kumda New, Rajgamar, and Gayatri – had breached this price level in August.
- All the mines recorded a fall in bid prices except Jagannath OC mines.
- The highest fall in bid prices was seen in Chhal OC with a 38% fall from the last auction.
Outlook
In the near term, the drop in auction prices will translate into lower bids at the resellers’ market. This would be a win-win situation for both traders and end-users but it has to be reinforced with adequate supply in the coming months.
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