Sharp fall in power demand lowered coal sale in recent special forward auction conducted by South Eastern Coalfields Ltd (SECL), as the bid price was pulled down by the cautious approach taken by the buyers.
In the auction held on 17 Dec ’20, the company had floated 2,350,000 t coal specially for power producers, wherein 1,426,000 t was sold at an average bid price of INR 818.6/t. Price realization for coal sale was down 18% m-o-m from INR 1000.89/t recorded in Nov ’20.
It is pertinent to note that sale under this auction scheme resumed after a gap of 4 months, with successive round being held in the month of November and December.
The previous auction also witnessed better sales in terms of percentage quantity allotted; where out of 1,950,000 t offered on sale, 71% material was sold compared with 61% booking seen this term.
With the arrival of winter season in the country, power consumption decreased 12% m-o-m to 97.91 BU in Nov ’20. Further reducing the coal demand, power plants based in Western region comprising of facilities in Chhattisgarh and Madhya Pradesh bolster a healthy coal stock of 12.32 mn t as on 21 Dec ’20, with only 4 of them having critical stock level below 7 days.
Key findings:
With gradual recovery in demand, recent spot auction conducted by SECL had witnessed higher bid price to the tune of INR 914/t over the reserve coal price. However, no improvement was noted for coal sale envisaged for power producers.
Except for G11 coal from Dipka colliery which received premium of INR 10/t, rest of the lot was sold almost at the floor price. (Detailed source-wise result can be seen here). In contrast, highest premium noted for sale conducted in Nov ’20 was INR 330/t.
Buyers continued to show disapproval to the coal offered from Balrampur colliery, as the lot remain unsold for the second month running.
Going forward, the company has planned another round of auction for sale of 987,740 t coal, this time for non-power sector under exclusive auction on 28 Dec ’20.
Leave a Reply