SECL’s Coal Auction Prices Remain Unchanged

SECL’s domestic coal auction fetched poor response in Apr’16 again. Recent auction witnessed a stability in bid prices, which was almost similar in the wake of low buying interest. While, 45% quantity sold in floor prices.

The state run largest coal producer and subsidiary of CIL, SECL had concluded a coal e-auctions held on 11 and 13 of Apr’16. The company had put a total quantity of 1.6 MnT in the auction, about 0.3 MnT and 1.1 MnT respectively. In addition, about 0.4 MnT (25%) coal was sold, out of which about 45% material sold at base price.

However, the bid prices were more or less alike as compared to last month for different grades and mines. Whilst, 57% quantity was brought by top 10 participants in this auction.

SteelMint assessed that since the mid of FY16, SECL’s coal auction platform not performing well as expected by the government earlier. On the grounds of rising demand of the industries, the ministry had raised its yearly coal auction quantity to 55 MnT in FY16 from 45 MnT in FY15 on account to cater indigenous necessity largely.

Contrastingly, response was not much pleasing for the company, although yearly output was increased by CIL on the same concern. Only 25% of the quantity sold due to lack of participation of consumers, as they are deterring to pay high for comparatively low grade domestic coal as slowing global demand and bottomed global coal market are confining them.

Apr’16 auction registered a negligible price rise at an average about INR 150/MT for all grades of coal compared to last month.

Big participants in the auction

In the recent auction, out of the total sold quantity, about 57% of coal was brought by top players such as BALCO, Prakash Industries, Godavri Power, MB Power, Ambuja Cement, Reliance Cement, Monnet Ispat & Energy etc.

Source: SteelMint
Quantity in MT
Price in INR