South Eastern Coalfields Ltd. (SECL) witnessed bid prices rise sharply at its recent auction as buyers continued to remain active in purchasing cheaper domestic coal amid soaring global prices.
The CIL subsidiary held an auction on 11 Mar’22 after a month’s gap which received overwhelming response. Notably, the entire offered volume of 1.53 mnt comprising grades ranging from G5-G16 was sold out.
In the process, SECL received the highest bid of INR 12,045/t for G7 coal offered from its Amadand colliery. Previous high bid levels were seen at INR 10,949/t at the auction held in Oct’21.
Grade-wise Bid Price
Prices in INR/t, exclusive of taxes
High-calorific value coal of grades G5 and G6 received bid prices that were in excess of INR 10,000/t for Mar’22, thereby indicating robust demand.
On the other hand, despite receiving a record bid price, the average price realisation for the G7 grade reduced to INR 9,757/t primarily due to the price disparity. Notably, G7 was offered from four different collieries, among which material from the Beheraband colliery of SECL was booked at a lesser price of INR 7,817/t.
Nevertheless, bid prices across the entire set of coal grades offered were particularly high over the notified price. Overall, the auction fetched a price realisation of INR 4,554/t, which was around 390% higher than the assessed price of INR 930/t.
Critical for non-power sector
The situation remains critical for the non-power sector which is dealing with CIL’s policy of according priority to the power sector in terms of coal supply.
This comes at a time when coal prices in the international market have reached unprecedented levels. Currently, the price of NAR 5500 kcal/kg South African coal at portside was heard at INR 24,500/t, with limited material available for sale.
Adding to the woes of the end-user industries, the introduction of a single window for auction sales has supported exponential growth in bid premiums encouraged by wider participation that includes the likes of traders.
Going forward, aggressive procurement in the auctions is expected to continue until there is rapid improvement in the supply situation.
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