The state owned Coal India Ltd. has announced to increase 10% price on lower grades and to reduce price for higher grades by an average of 12% with the immediate effect. Board of Directors meeting of the company held on May 28 2013 has approved rationalization of coal prices from 00 hrs of May 28, 2013.
PRICE EFFECTED GRADEWISE
Grade 6 -17 : 10 percent on an average increased
Grade 2 & 4: 12 percent on an average reduced
Impact on Steel Making: Spoken to some sponge iron manufacturers they said the ” Increase in low grade coal price and decrease in high grade coal would neutralize the price effect to the big manufactures who has more than 300 TPD production, but the for small manufacturers like 100 TPD production cost will increase by minimum Rs 100-200/MT” They also advised 40% of coal they are getting by linkage and remaining buying from open source.
Impact on Power Plant: SteelMint also taken view of power sector, they said “power industries receiving coal from Coal India mostly by coal linkage. So as the base price will change, cost of coal will change respectively. It will be an additional burden on production cost. However auction price will remain intact as in this month auction low grade price have increased by 20% from last month”
Auction price will remain intact: By taking the view of the Bidders, changes in base price would not affect much on auction price. As in general for low grade coal the price in auction goes higher by Rs 600 -800 over base price.
The high grade coal have seen a very short off takes as the International coal prices are keep falling and CIL is also looking forward on revising the price of high grade coal.
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