In a bid to liquidate the excess stock in hand, South Eastern Coalfields Ltd (SECL) has extended its reliance on auctions to offer medium-term supply assurance to its customers.
It may be mentioned, SECL has been carrying out both exclusive and forward auctions since Nov ’20. The company now plans to conduct both exclusive and special forward auctions on 28 Jun ’21, thus stretching these over an eight-month period.
Unlike the other auction windows, exclusive and special forward auctions cater specifically to the coal requirements of the non-power and power customers respectively. These provide an extended period of lifting of material against the booked quantity. But, these are usually not conducted on a regular basis compared to the spot auctions.
The company has, however, decided to continue offering coal through these auctions in order to liquidate the excess inventory, which, despite falling on a monthly basis, was still assessed at an elevated level of 21.89 mn t at the end of May ’21.
During the first quarter of FY ’22 (Apr-Jun ’21), total coal volume put on sale in these auctions has been lower by 48% y-o-y to 6.23 mn t compared to 11.94 mn t in the first quarter of FY ’21. However, the allocation surged by 76% y-o-y to 2.98 mn t in this period due to improved demand.
Coal offering in upcoming auctions
Special forward auctions:
The latest special forward auction will feature sales of 898,000 tonnes (t) of coal for the three-month period of Jun-Aug ’21. The entire offered volume comprises of low calorific value (CV) coal in the G13-G16 range.
Exclusive auction:
For the exclusive auction, a volume of 242,000 t has been put up for sale for an extended period of six months (Jun-Nov ’21), wherein majority of the coal is of high CV value in the G5-G9 range.
In the previous auction sale concluded via the spot scheme on 9 Jun’21, the company had received improvement in bid prices.
Notably, the booked quantity of 421,600 t was sold at an average price of INR 1,948.75/t, which was 49% higher than the assessed notified price of INR 1,303.98/t. Moreover, 85% of the high CV coal in the G6-G9 range was lifted at fairly high premium over the reserve price.
A similar response would be expected in the upcoming auctions, especially from the non-power sector given the fact that industrial activities have pick up lately with the easing of lock-downs across Central India.
Leave a Reply