SECL’s recent coal auction fetched poor response again in Jan’16. Material sold at around INR 100-300/MT higher than the base price for different grades and mines.
Since the beginning of 2016, SECL’s coal auction platform is not receiving any positive hope from buyer’s side. The company received weak response again in the 1st auction of the year. In this auction about 0.1 MnT coal has received by Cement manufacturers.
The state-run largest coal producer and subsidiary of CIL, SECL concluded coal e-auctions held on 19 Jan’16 and 21 Jan’16 with 0.9 MnT of non-coking coal. In the auction, company sold about 67% of the total quantity.
In the current auction, most of the quantity was sold at base price by registering a negligible price rise of around INR 200-400/MT compared to last month. However, prices were more or less stable from last couple of months.
[su_pullquote align=”right”]A participant highlighted, “Domestic requirement of coal is not increasing in India owing to under performed power and steel industry. On the other side, depreciating Indian currency, Rupee against USD is still a concern for importers, leading to marginal growth in participation and bid prices in this auction.” [/su_pullquote]
However, falling steel prices, slowing global demand and bottomed global coal market are the major factors deterring participating companies from couple of months to pay high for comparatively low grade domestic coal.
For now Indian sponge manufacturers preferring South African imported grade rather than domestic as seems more economically viable.
Big participants in the auction
In the recent auction, out of the total quantity put under hammer, about 50% of coal was brought by India’s big players such as BALCO, Ambuja Cement, UltraTech Cement, Lafarge India, DB Power, Bharat Benefication & Power, Indermani Minerals and Agarwal Fuels etc.
• Bharat Aluminum received total 0.17 MnT of coal from Gevra OC and Manikpur OC mines. Highest quantity was brought from Gevra OC with winning price of INR 1,290/MT (125,000 MT) for size G11 ROM coal and INR 1,090/MT (41,450 MT) for size G12 ROM coal from Manikpur OC (Stock).
• Indermani Minerals had brought about total 49,350 MT coal through this auction. The company bid at INR 1,240/MT for G11 size coal from Gevra OC(Stock) mine with base price of INR 1,140/MT. Also, it received small quantity from Manikpur OC (G12 Sized ROM) and Mahamaya UG (G4 STM).
• Ambuja Cement brought 40,000 MT material from Gevra OC (G11) size coal at price of INR 1,290/MT with base price of INR 1,140/MT.
• Bharat Benefication & Power received total 21,000 MT of coal from Baroud OC (G8) and Manikpur OC (G12) size coal at price of INR 2,038/MT and INR 1,098/MT respectively.
| Company Name | Colliery | Grade | QTY | Floor Price | Bid Price | Sector |
| Bharat Aluminium | Gevra OC | G11 Size | 125,000 | 1,140 | 1,290 | Power |
| Indermani Mineral | Gevra OC | G11 Size | 44,150 | 1,140 | 1,240 | Trader |
| Ambuja Cements | Gevra OC | G11 Size | 40,000 | 1,140 | 1,290 | Cement |
| UltraTech Cement | Gevra OC | G11 Size | 28,000 | 1,140 | 1,290 | Cement |
| Bharat Benefication & Power | Baroud OC | G8 Size | 20,000 | 2,028 | 2,038 | Trader |
| Lafarge India | Gevra OC | G11 Size | 20,000 | 1,140 | 1,290 | Cement |
| Bharat Aluminium | Manikpur OC | G12 Size | 18,250 | 1,068 | 1,088 | Aluminium |
| DB Power | Baroud OCM | G8 Size | 14,000 | 2,028 | 2,028 | Power |
| Bharat Aluminium | Manikpur OC | G12 Size | 13,500 | 1,068 | 1,098 | Aluminium |
| Agarwal Fuels | Manikpur OC | G12 Size | 10,000 | 1,068 | 1,098 | Trader |
| Saffron Resources | Baroud OCM | G8 Size | 10,000 | 2,028 | 2,038 | Trader |
Source : SteelMint
Quantity in MT
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