- SECL auctions support higher domestic replacement costs
- Washeries face tight ROM coal availability, washed coal prices rise
India’s domestic non-coking coal prices strengthened further this week, with 5,000 GCV coal ex-Bilaspur rising INR 50/t w-o-w to INR 6,750/t as on 14 August 2026. The grade has increased by INR 1,250/t m-o-m from INR 5,500/t on 14 July. Meanwhile, 4,500 GCV coal remained unchanged w-o-w at INR 5,150/t, but was INR 1,100/t higher m-o-m. Tight availability, monsoon-related supply disruptions and firmer price expectations continued to support domestic coal prices.
Domestic coal prices remain firm
Market participants said constrained availability and monsoon-related disruptions continued to affect coal grades and supply consistency, prompting traders to maintain firmer offers.
Recent SECL auction transactions also contributed to higher domestic coal replacement costs. Aggressive participation from sponge iron plants ahead of monsoon restocking, combined with elevated imported coal prices, increased competition and supported higher bid prices and premiums. However, a trader noted that activity at the trader level remained limited, with low transaction volumes despite firmer quoted prices.
The sharp m-o-m increase in both grades also highlighted the sustained rise in domestic coal replacement costs through the monsoon. While prices have continued to move higher, actual spot-market activity has not increased proportionately, suggesting that the market remains driven more by supply tightness and replacement costs than by broad-based speculative buying.
Washed coal prices rise on tight ROM supply
Washed coal prices strengthened further as limited availability of suitable ROM coal and stronger enquiries supported higher offers. BigMint assessed 38-39% FC (5,000 GCV) washed coal FOR Raipur at INR 7,000/t as on 12 August, up INR 200/t w-o-w.
Market participants said ROM coal supply remained low while demand and enquiries for washed coal were relatively stronger. The increase in ROM coal prices further raised replacement costs for washeries, providing additional support to washed coal offers.
Monsoon conditions continued to affect coal quality and supply consistency, making it difficult for washeries to secure the required quantity and grade of feedstock. As a result, the market remained tilted towards sellers, with limited availability supporting prices despite the absence of a broad-based improvement in industrial demand.
Sponge iron prices provide additional support
The domestic sponge iron market also witnessed an upward movement, with PDRI ex-Raipur rising INR 700/t w-o-w to INR 26,050/t. The eastern region recorded comparatively stronger gains as prices there were relatively lower than in other regions, supporting a catch-up movement.
The increase was also supported by margin pressure among sponge iron producers, prompting sellers to raise offers. The positive momentum in the previous session further strengthened seller confidence and encouraged firmer price levels.
However, the overall market movement remained moderate, with no significant improvement in actual demand. Enquiries remained fairly good, while trading activity was moderate and largely need-based. Buyers had already secured material during the previous session, limiting fresh participation.
Thus, higher sponge iron prices and continued enquiries provided some support to coal demand, but the market remained primarily driven by tight supply and replacement costs rather than a broad recovery in consumption.
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