SECL Coal Auctions Gather Momentum after Poor Sales in its Previous Term

SECL received good response from the buyers after a lacklustre performance in its previous auction.

SECL, largest subsidiary of CIL, had conducted coal auctions for the sales of 1.55 MnT and 0.984 MnT coal on 22 Feb’17 and 2nd March’17 respectively. Auction conducted on 2 Mar’17 showed better performance than the auction conducted on the previous date.

In the recent auction concluded on 2 Mar’17, about 61% of the total offered quantity was sold compared with 28% out of 0.98 MnT offered for auction in 22 Feb’17.

Auction held on Mar’17 offered higher bid prices, as of the total sold quantities only 16% were sold at base price. Moreover, 70% coal of the sold quantities received higher bids in the range of INR 100-1000/MT over the base price. Whereas 46% of the total sold coal commodities were finalised at the base price in Feb’17 Auction.

Analysis of Mar’17 Auction:
SECL had offered 1.55 MnT of Non-coking coal in Mar’17 auction by Road, out of which 0.984 MnT was sold.

Out of the total coal offered 0.45 MnT was sourced from Baroud mine of Raigarh, 0.3 MnT from Kusmunda mines, 0.25 MnT from Gevra mines, 0.16 MnT from Gare Pelma and remainder of the quantities from various coal mines of Raigarh and Korba based mines of SECL.

Source: CoalMint Research
Quantities in MT
Results from Auctions held on 2 Mar’17

Major Coal Receiving sectors:
Sponge Iron sector procured the major share of the sold quantities in the Mar’17 Auction. Aggressive buying from Sponge manufacturer resulted in fewer imports from South Africa, as they rely on cheaper domestic coal.

Sponge sector acquired 0.29 MnT of the quantity being sold. Followed by small traders who purchased 0.267 MnT and power sector obtained 0.211 MnT in Mar’17 Auction.

Source: CoalMint Research
Results from Auction held on 2 Mar’17

Major participants in the Auction:
Top 10 companies acquired more than 60% of the total being sold in the auctions. Major participants were BALCO, Indermani Minerals, ACC Ltd, Ambuja Cements, Jindal steel and Power and Hindalco Industries.

BALCO emerged as the top coal receiver in the Mar’17 coal auctions, which acquired 0.2 MnT coal for its operating its power station.

Source: CoalMint Research
Quantities in MT
Prices in INR
Results from Auctions held on 2 Mar’17