Depending on supply and demand dynamics, thermal coal prices on the reseller’s market are exhibiting varied trends. Prices increased marginally in Wani (Maharashtra) and Bilaspur (Chhattisgarh) but in Ramgarh (Jharkhand) prices remained unchanged. However in Raniganj, West Bengal, the trader’s market saw a decline in coal prices.
Supply tightness drives prices higher
The price of coal (4,000 GCV ROM) in Wani is assessed at INR 11,000/tonne (t) on 29 July, 2022, up INR 500/t w-o-w. Similarly, 5,000 GCV ROM coal in Bilaspur is assessed at INR 12,000/t on 29 July, up INR 750/t w-o-w.
Prices increased despite the decline in bid prices in recent auctions.
Wani: Heavy rains delay dispatches
Wani traders procure coal from spot auctions conducted by Western Coalfields Ltd (WCL). The auction on 29 June fetched a premium of 185% over the notified price, which was less than 221% premium received in May.
This anomaly is attributed to the fall in dispatches from the mines because of heavy rains. WCL’s coal offtake and production for July fell by 45% and 65% from its target.
Limited supply by WCL has caused a shortage among traders thereby driving prices higher.
A trader from Wani told Coalmint: “Dispatches of higher grades have been impacted more.”
Bilaspur: Coal shortage in trader’s market
In Bilaspur prices are rising due to coal shortage as the previous auction by South Eastern Coalfields Ltd (SECL) was held in May, while dispatches from the recent auction held on 19 July have not yet started.
However, it is to be noted that the SECL spot auction on 19 July received a bid premium of 413% over the notified price which was 495% for the auction held in May.
Surprisingly, the fall in bid prices have not impacted prices in the reseller’s market. Stating the reason, a trader source explained: “The fall in bid prices was marginal. Bids are still 2.5 to 3 times higher than last year”.
Mixed prices trends in Ramgarh, Raniganj
5,800 GCV coal in Ramgarh is assessed at INR 13,000/t on 29 July, unchanged w-o-w. Traders attribute this to stagnant market conditions.
In Raniganj 6500 GCV coal is at INR 15,250/t, down INR 550/t w-o-w. Low demand amid seasonal slump in demand has pushed prices down.
Outlook
In the near term, coal prices in the domestic reseller’s market are likely to edge lower compared to the first half of 2022 because of seasonal slump in demand. However, supply tightness could trigger short-term fluctuation in prices.
Leave a Reply