Coal India Ltd (CIL) has witnessed a gradual sign of revival in its coal sale via auctions-wherein higher allocation along with better price value was seen during Jun’20.
The miner had recorded a sale of 5.83 mn t coal in the auctions conducted across its various subsidiaries, which increased 21% m-o-m from 4.83 mn t in May’20.
Despite the decline in the monthly offered volume which was down by 23% m-o-m at 23.52 mn t, the auction in Jun’20 managed sale percentage of 25% that was the highest noted over the three months period.
Notably, coal volume offered via auction route has been substantially increased in the first quarter of FY21, in order to liquidate the surplus coal stock at mines. Incidentally, the total quantity of 95.25 mn t put across via various auction during Apr-Jun’20 has already surpassed the combined sum of 94.76 mn t that was offered in entire of FY20.
Shift towards spot scheme of auction:
With an intend to elevate coal supplies for power and non-power sector, offered quantity in the respective auctions were significantly raised which accounted around 60% of the total volume in the first quarter.
However, with adequate coal availability at the power stations and lack of industrial activities, these auctions had fetched dull response from the coal buyers.
As a result, CIL had turned towards spot scheme of auction where bulk of 14.33 mn t coal was offered during Jun’20.On the other hand, the total volume put forward in special forward and exclusive was reduced to 3.727 mn t.
Growth in price premium:
During the month, comparatively better response in spot and special spot auction resulted in higher earnings from the coal sales.
The company fetched net revenue of INR 1012 crores from the auction, thus gaining an increase of 11% over the notified coal value. In contrast, auction in the past two months had yielded premium of 7%.
Besides, there was an overall growth in sales realization for the booked quantity, which was sold at an average price of INR 1735.8/t in Jun’20 against INR 1494.67/t in May’20.
| Name of Auction Scheme | Spot | Special Forward | Exclusive | Special Spot |
| Quantity offered | 14.33 | 1.40 | 2.33 | 5.47 |
| Quantity allocated | 3.68 | 0.64 | 0.56 | 0.95 |
| Total Notified Value | 549.21 | 70.81 | 105.21 | 185.05 |
| Total Booking Value | 618.41 | 70.81 | 111.69 | 211.58 |
| Increase over Notified Value(in %) | 13% | 0% | 6% | 14% |
Quantity in mn t | Prices in INR/t
Going forward, it is expected that sales via auction would be sustained with the improved demand boosted by the fact that coal consumption at power stations is rising gradually.
Leave a Reply