India: Washed coal prices firm amid monsoon supply constraints

• ROM coal shortages constrain washery production
• Sponge iron demand strengthens despite limited bulk buying

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 7,050/t on 19 August 2026, up INR 50/t w-o-w. Production at washeries slowed as monsoon conditions disrupted ROM availability, while slower SECL dispatches and lower auction frequency by CIL subsidiaries further tightened feedstock supply. Several sellers said they were holding back offers until the monsoon eased, while active enquiries from consumers widened the supply-demand gap.

Domestic coal prices strengthen on auction premiums

India’s domestic non-coking coal prices also strengthened on 18 August. 5,000 GCV coal ex-Bilaspur increased INR 100/t w-o-w to INR 6,850/t, while 4,500 GCV coal rose INR 50/t to INR 5,200/t.

Recent SECL auctions provided further support, with final bid prices for some grades increasing by up to INR 1,500/t. Healthy participation and firm premiums across different grades lifted replacement costs and encouraged sellers to maintain higher market offers. However, the price increase was also being driven by supply constraints rather than a broad-based rise in spot transactions.

Sponge iron demand supports coal market sentiment

Domestic sponge iron prices strengthened further, with PDRI ex-Raipur rising INR 1,400/t w-o-w to INR 27,100/t on 19 August. Strong enquiries and improved trade activity increased buyer participation and boosted seller confidence, although bulk purchases remained limited as several buyers had already covered immediate requirements.

Limited availability of key raw materials during the monsoon, together with higher pellet and coal costs, continued to raise sponge iron production costs. Improved buying activity in finished steel also supported market sentiment.

For washed coal, stronger sponge iron demand provided additional support, while low ROM availability restricted production. Overall, the market remained supply-led, with active enquiries but insufficient material availability keeping sellers in a stronger negotiating position.