Representative coal price derived under the national coal index (NCI) have recorded an uptick in line with the gradual improvement in demand after significantly falling from the levels seen in Mar ’20.
As per the latest notification issued by Coal Ministry, the prices have increased in Oct ’20 on the monthly basis, with major changes being noticed for the premium grades of both coking and non-coking coal (Monthly representative price can be seen here).
The price rally for this coal lot was mainly supported by the late spurt in imported coal prices. On the other hand, for coal pertaining to bottom grade having no import component, prices remain depressed. Still, the prices were assessed higher than the latest CIL notified prices which have been recently revised after a gap of two years.
While, separate calculations are involved for evaluating NCI and representative prices, both have shown almost similar movement for the period under consideration. Biggest drop in index was recorded for bottom grade of non-coking coal, which ended the successive rise noted for the past two months.
Among the remaining grades, apart from non-coking coal belonging to the middle tier band, rest of the lot had witnessed m-o-m rise in index during Oct ’20.
The NCI-derived prices are expected to extend their growth in the coming months finding support from the improved sales in CIL auctions having fetched higher price realization and fiscal-high premium over notified price in Nov ’20. These will have a major role to play for coal produced from the blocks that have been auctioned for commercial sales.
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