South Eastern Coalfields Ltd (SECL), a subsidiary of Coal India, has witnessed an increase in the bid premium on coal sales via spot e-auction in January 2023.
On 16 January 2023, SECL conducted an auction for 884,000 t of non-coking coal. The grades offered were G5, G6, G8, G9, G10, G14, and G15, of which G14 and G15 constituted 80% of the total material on offer. The entire quantity was booked at a bid premium of INR 3,529/t, higher by 278% over the weighted average notified price of INR 934/t.
This is the first time since May 2022 that the bid premium has increased. In December 2022 auction, bid premium stood at 180%, and in November at 225% over the notified price.
Compared to December’s auction, SECL offered more than double material for January auction but decreased the number of grades.
Bid prices for all grades rise except two
Except G5 and G8 grades, bid premiums for all others have increased over the previous auction. Bid prices for G5 and G8 grades decreased by 14% and 12%, respectively.
Bid prices for G10 grade have increased by more than 50% from December’s auction.
Notably, the weighted average bid price for Vijay West UG mine was the highest at INR 8,062/t, while that for Chhal OC mine stood at INR 2,592/t.
Strong demand seen from power sector
Almost 64% of the total SECL’s offering in the January auction, i.e., 565,300 t, was booked by the power sector, including captive power plants (CPP). However, in December’s auction, only 11,000 t was booked by the power sector.
It is to be noted that among power utilities, Jindal Power Ltd alone booked 32% (287,300 t) of the total material on offer and Vedanta booked 287,300 t (12% of the total offering) for its CPP.
Meanwhile, 250,000 t was booked by traders, almost similar to that was booked in December.
Sponge iron producers booked 57,400 t, down 28% booked in December.
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