India: Washed coal prices rise sharply amid mined raw coal shortage

• Washed coal offers remain limited in Bilaspur
• Sponge iron prices gain on improved steel sentiment

Indian washed coal prices strengthened sharply in the assessment week ended 16 September 2026, with 38-39% FC (5,000 GCV) washed coal FOR Raipur rising INR 450/t w-o-w to INR 8,750/t. The increase was driven primarily by severe ROM coal availability constraints, with no fresh SECL auction schedule announced so far.

Sellers remained reluctant to offer washed coal as production remained at its lowest levels, while some suppliers were exploring coal from other regions to meet requirements. Domestic coal prices also strengthened, further increasing replacement costs.

ROM shortage keeps washed coal offers firm

ROM coal availability remained the key constraint for washeries in the region. With no new SECL auction schedule yet announced, sellers faced limited access to raw material, resulting in the lowest washed coal production levels. Several sellers were therefore not offering washed coal, while available offers were quoted at significantly higher levels.

Domestic coal prices also moved higher during the week. Exw-Bilaspur 4,500 GCV coal rose INR 400/t w-o-w to INR 6,300/t, while 5,000 GCV coal increased INR 50/t to INR 8,050/t as of 15 September. The combination of higher ROM costs and limited physical availability kept washed coal sellers firm.

Some sellers were also looking towards coal from other regions amid the shortage of local material. However, this has added to replacement costs and limited the scope for lower offers in the washed coal market.

Sponge iron gains support from steel market

Sponge iron prices strengthened during the week, with PDRI ex-Raipur rising INR 700/t w-o-w to INR 29,400/t as of 16 September. Market sentiment improved alongside firmer finished steel prices, encouraging sellers to raise offers.

However, selling pressure remained visible in the Raipur market at higher levels, while buyers showed some caution as prices increased. Trade activity was moderate, with buyers continuing to assess the sustainability of the recent price rise.

The improvement in sponge iron prices provided some support to washed coal demand. However, physical availability remained the dominant factor, with limited ROM supplies restricting washed coal production and keeping sellers’ offers elevated.