Resurgence in power demand backed by an increased intake from non-power sector facilitated Coal India Ltd with an improves coal sales in February as it looks optimistic of closing the current fiscal with bookings of 120 mn t via auction route.
The company sold 13.97 mn t coal under various auction schemes during Feb ’21, registering a robust growth of 33% m-o-m from 10.48 mn t in Jan ’21.
Encouraged by the recent surges in electricity consumption, allocation in special forward auction increased 32% m-o-m to 5.69 mn t as power producers lifted their booking to prepare themselves for the impending summer demand.
Similar response was seen from the non-power customers as they increased their appetite for coal in exclusive and spot auctions.
Barring these regular auctions, unfavorable outcome was seen in both versions of special spot auctions where the company had failed to manage even 1% allocation out of the total 4.86 mn t coal offered for sale.
| Auctions | Feb’21 | Jan’21 | % Change |
| Spot | 4.41 | 3.81 | 16% |
| Special Forward | 5.69 | 4.31 | 32% |
| Exclusive | 3.83 | 2.09 | 84% |
| Special Spot | 0.03 | 0.05 | -29% |
| Special Spot for Importers | 0.00 | 0.23 | -100% |
| Total | 13.97 | 10.48 | 33% |
Source: CoalMint Research | Quantity in Million Tonne
Price premium loses cadence:
There was a big leap in premium fetched for coal sales post Oct ‘20, when CIL re-introduced add on over the notified price to gauge the market response. However, the premium has come down steadily since then.
Gain over notified price was assessed at 21% in Feb ’21 against 25% in Jan ’21. Besides, price realisation for sales dropped to a 4-month low of INR 1487/t as higher coal availability made auctions less competitive in terms of pricing.
Nevertheless, booking of 105.88 mn t coal under auctions up to Feb ’21 compared with 62.25 mnt in the year-ago period has helped CIL to bolster volume expansion especially in view of the narrowed margins in the difficult market conditions.
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