CIL subsidiary South Eastern Coalfields Ltd. has witnessed a progressive decline in bid premiums on coal sales via spot e-auction in December 2022.
Bid premiums over the notified price fell by 180% for the auction held on 24 December, marking a steep decline from the levels of 225% in November. Notably, this was the fifth straight decline in bid premium.
The miner had offered 400,000 tonnes of non-coking coal with grades ranging from G5 to G14. The entire quantity was booked at an average price realisation of INR 5,426/t over the weighted average notified price of INR 1,936/t.
Why bid prices fell?
Bid prices fell amid low demand for coal because of industrial slowdown. End-user share in procurement was only 40% of the total quantity.
In addition, there has been significant improvement in coal offerings via spot auction. SECL has offered more coal in Q3 FY23 than in the previous two quarters combined.
Grade-wise comparison
In comparison to the previous auction, the number of grades offered increased in December. However, only a few grades and mines were common in SECL’s November and December auctions.
The common grades offered in November and December were the mid-CV grades of G9, G10, and G11. These grades have fallen by up to 33%.
Sector-wise allocation
- Traders brought 60% of the total quantity, which means 244,000 t of coal will be available in the resellers’ market.
- The sponge iron sector booked 20% of the total coal on offer.
- Coal booked by the cement industry was 11% of the total quantity.
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