Central Coalfields Ltd (CCL) has received higher bid premiums in its latest spot auction as prospects of export sales prompted buyers to procure coal at elevated prices.
The company had offered 598,500 tonnes (t) in the auction held on 20 Jul ’21, of which 435,580 t were sold at a price realisation of INR 1,995.15/t, helping CCL garner 38% premium over the assessed notified price of INR 1,446/t.
There was a significant rise in bid premiums, indicating an improvement in the same from the previous auction. Notably, the booked quantity in Jun ’21 was sold at a premium of 25% over the notified price.
Renewed interest in superior quality coal
With a gradual revival in economic activity and soaring prices of imported cargoes, robust buying interest was seen for the washery grades of coking coal.
The highest bid price of INR 5,114.44/t was received for W-IV grade offered from CCL’s Jharkhand colliery, which was around INR 723/t higher than the previous month’s price levels.
Besides, coking coal grades from other collieries also garnered bid prices in excess of INR 4,000/t. In fact, out of the bulk 70,000 t of coking coal offered in the auction only a paltry of 70 t were left unsold.
In addition, improved demand was also noticed for high calorific value (CV) non-coking coal which was sold at a high premium. However, apart from selective preference no such response was seen for the low CV coal.
Lower coal offering a concern
CCL returned to the auctions fray in Jun ’21 after failing to register a single auction sale in the opening two months of FY ’22 (Apr-May ’21).
Nonetheless, the company’s coal offerings in the auctions have been receding in view of the declining coal stocks which came down to 6.42 mn t at the end of Jun ’21. Incidentally, coal volume offered in the latest spot auction was 57% lower on the month from 1,376,500 t in Jun ’21.
Encouraged by CIL’s decision to allow export sales of auctioned coal, a buying spree was seen in the spot auction which is subsequently expected to trigger increased coal sales in the coming months.
It is pertinent to note that the company had witnessed overwhelming response in the special spot auction held in Jun ’21, wherein out of the bulk 1,722,500 t put-up for sale only 5,000 t were left unsold.
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