Coal buyers in India should now brace themselves up for shelling out more money during their purchases in the upcoming E-auctions as stronger demand alongwith higher international prices will drive the auction prices higher.
The largest Thermal Coal user segment—the power producers—are reeling under coal supply shortage. Coal stocks at power plants have declined to record-low levels, of around 10 MnT or six days of supply, and at the same time, infrastructure constraints prevented re-stocking—compounding to the tight supply situation.
At the same time, the recent wage hike for the employees of Coal India Limited will also contribute towards the prospect for E-auction prices to go higher.
On the other hand, Indonesian and Australian Thermal Coal prices are expected to move substantially up during the winter season mainly due to the traditional stocking practice by the Chinese consumers. With the international prices to go up, E-auction prices in India will also follow trend.
Source: CoalMint Research
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