After a brief period of absence from the auctions platform, Coal India Ltd (CIL), with the help of its subsidiaries, has resumed sales by expanding the coal volume offered to its consumers in Nov’21.
The mining giant had been under pressure to revive the coal stock position of the power plants. As a result, offerings via auctions were reduced to 5.08 million tonnes (mn t) in Sept’21, which was the lowest volume seen since Aug’19.
Sales in Oct’21 was even more badly affected, as only 2.77 mn t was offered during the month in which CIL had restrained its subsidiaries from conducting auctions.
As per CoalMint’s data, the last auction held was on 9 Oct’21 before the announcement was made. After which, a few subsidiaries, Central Coalfields Ltd (CCL) and Eastern Coalfield Ltd (ECL), had withdrawn their proposed auctions.
Making a swift return, CIL subsidiaries have significantly increased their offerings in Nov’21. Notably, a total of 16.65 mn t of coal has been put on sale in the first 9 days of Nov’21, which has already exceeded the combined volume offered in the past two months.
Upcoming auctions
MCL led from the front by floating 14.66 mn t of coal for sale and was the only subsidiary to offer to the non-power sector under spot and exclusive schemes.
Quantity in Metric Tonne
In fact, the subsidiaries have shown greater appetite in offering coal to the power sector in order to replenish the depleted coal inventories at the power stations. Of the total quantity in the scheduled auctions, almost two-third of the volume has been offered under the special forward scheme which is earmarked only for power producers.
A gradual build-up in coal stock at power plants has come to be a major relief for the non-power sector whose supplies were getting affected because of the low stocks at power plants. As on 26 Oct’21, the inventory level was assessed at 9.02 mn t, up 20% w-o-w compared to 7.5 mn t as on 19 Oct’21.
Besides, corrections in imported coal prices have also eased the burden on the end-user plants to an extent.
However, with several industries still operating at lower capacity due to acute coal shortage, the volume offered to the non-power sector is not up to the mark and thus the prevailing high prices are expected to continue in the upcoming auctions.
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