South Eastern Coalfields Ltd (SECL), the largest coal producing subsidiary of Coal India, has witnessed overwhelming response from the non-power sector for coal sales envisaged under the exclusive auction scheme.
The company had offered coal in the specific auction after a gap of two months on 14 Sept’21, and it was made special by the fact that the entire 360,000 tonnes (t) of coal put up for sale was booked.
The auction sale had also fetched a price realisation of INR 3,009/t, which was 130% higher than the assessed notified price of INR 1,307/t.
Previously, 100% sale under the exclusive auction scheme was reported by Bharat Coking Coal Ltd (BCCL) back in May’20.
The ongoing supply crunch in the domestic market has left the non-power sector struggling to meet its coal demand at a time when SECL’s dispatches were also affected due to the monsoon. Consequently, aggressive bidding was seen in the auction.
The company’s coal movement via rail-mode had fallen to its lowest for the fiscal in Aug’21, down 43% m-o-m to 3.7 rakes/day from 6.5 rakes/day in Jul’21.
Grade-wise bid prices
Greater competitiveness was seen amongst the buyers for high calorific value (CV) material. Incidentally, G5 coal was sold at a bid price of INR 5,813/t against the reserve price of INR 3,297/t.
Quantity in Metric Tonne (t) | Prices in INR/t
But, G9 coal being the more popular grade amongst the sponge manufacturers, had received a premium in the range of INR 1,785-3,018/t over the reserve prices which was even higher than that of G5.
It is important to note that the sponge iron sector in Central India mostly prefers imported coal from South Africa. However, with drastic increase in imported prices, buyers have shown renewed interest in the comparatively cheaper domestic coal.
Recently, the South African 5,500 NAR coal was traded at INR 10,800/t at Vizag Port.
Overall, robust sales were seen for all grades except G13 which was sold at a rather lower bid price which was close to the floor price.
With CIL and its subsidiaries determined to replenish the depleted coal stocks at power plants, strong demand from the non-power is expected to continue in the near-term.
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