India: Trade-level coal prices drop in Wani, Maharashtra

Domestic coal prices in the resellers’ market at Wani, Maharashtra witnessed a marginal drop this week.  Prices dipped up to INR 400/t after bid prices fell in the WCL auction on 16 December, 2022.

Prices for 4,500 GCV coal in Wani, Maharashtra, stood at INR 9,600 per tonne ex-Wani on 23 December, 2022, a fall of 4% w-o-w, CoalMint data shows.

Traders are under pressure to reduce their offers in the reseller’s market despite not having received coal from the latest auction. A trader from Wani told CoalMint: “Buyers tend to procure only a limited quantity when bid prices fall in auctions, as they can procure a large quantity later. We reduced our offers as we have to clear our old stock.”

Fall in demand

Market participants informed CoalMint that coal demand has fallen for the past two weeks. Enquiries from the agro-industries and the steel and iron sector were not encouraging. Brick manufacturers in Maharashtra and neighbouring states had retreated amid warnings and later rains because of Cyclone Mandous.

Resumption of supplies to MSMEs

However, the resumption of coal supplies by Maharashtra State Mining Corporation to medium-sized and small enterprises (MSME) may have a negative effect on prices at reseller market. MSME will receive a total of 20,000 t of coal per month at reserve prices.

“Prices at the reseller market are 3–4 times higher than the notified price; this is definitely going to weigh down on prices,” a trader told CoalMint.

Bilaspur: Market in wait and watch mode

In neighbouring state of Chhattisgarh, prices remained unchanged as market participants are waiting for 24 December SECL auction.

Prices of 5,000 GCV coal in Bilaspur stood at INR 9,600/t exw, unchanged w-o-w as per CoalMint’s assessment. On demand side, there was no improvement, there are limited inquires and deals in the market.

Outlook

In the near term, prices are expected to fall both in Wani and Bilaspur as there is limited buying in the market while there are no supply concerns. However, the price correction is not expected to be steep.