Mahanadi Coalfields Ltd (MCL), the mining arm of CIL operating in Odisha, has witnessed sale of 32% of the coal being offered in spot auction, which was concluded on 5 Jun’20. The company had put forward 3,279,000 MT coal for sale out of which 1,056,890 MT was booked.
In recent auctions, the miner has stressed upon liquidating coal pertaining to the lower GCV band-width, with grades ranging from G12 to G15 being offered for sale.
While, no spot auction was conducted in the previous month, the quantity offered for current month’s sale was substantially increased from the auction held in Apr’20. However, in the absence of considerable growth in demand, the offered coal was procured at bids which were almost close to the reserve price.
| Grade | Quantity | Price | ||
| Offered | Booked | Reserved | Bid | |
| G12 | 880,000 | 619,900 | 1063.00 | 1070.65 |
| G13 | 809,000 | 2,990 | 980.00 | 980.00 |
| G14 | 1,440,000 | 386,000 | 897.00 | 897.83 |
| G15 | 150,000 | 48,000 | 708.00 | 708.00 |
Source: CoalMint Research
Quantity in MT | Prices in INR/MT
Key Inference drawn from the auction:
(a) Better response was seen for G12 grade of coal, which had fetched a marginal gain over base price among the remaining grades. Besides, it had recorded highest sale percentage in terms of quantity sold in the auction. (Detailed result from the auction can be seen here)
The sizeable rise in bid price was noted in case of lot offered from Ananta and Jagannath OCP, where average premium in range of INR 33-87/MT was received against the reserve price of INR 1063/MT.
(b) Although, all other grades excluding G12 had witnessed poor sales, G13 in particular, was the least preferred coal grade in the auction. Notably, no bids were registered for a total of 744,000 MT coal falling under the grade in five different lots.
(c) Higher quantity was booked under rail mode of dispatch, but better price realization for coal was seen under road mode of sale. Incidentally, 40% of the volume offered under rail mode of dispatch was booked, whereas road mode observed sale of 27% of the material put up in the auction.
The prevailing discount offered in auction has tempted some of the buyers to book bulk quantities via rail mode, which have been procured with relative ease at the base prices. However, in case of road mode of sale, where coal is available to be lifted in smaller lots, a stiff competition was noticed specifically for G12 grade.
In spite of the subdued response, the auction has given sign of mini-revival in the market compared with the result seen in the previous term, where only 20% of the material was booked in spot auction during Apr’20.
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