South Eastern Coalfields Ltd (SECL), the largest coal producing subsidiary of CIL, has received tepid response for coal sales held in Mar’20 over a frequent occurrence of auctions seen of late.
The spot auction concluded on 13 Mar’20 was the fourth round of coal sales witnessed in the past two months, as the miner continues to liquidate some of the excess coal stock. However, after witnessing a strong sale in term of quantity being sold in the previous auction, there was no dire need of booking reported in the current round.
Out of 1.9 MnT coal offered from 17 lots, only 66% of the material was sold at an bid price of INR 1486.22/MT, which was 11% higher than the assessed reserve price of INR 1343.13/MT.
Incidentally, 11 of these lots had noted unsold quantity including coal offered from Jampali OC which had failed to receive a single bid in the auction.
Detailed result of the auction can be seen here.
| Grade | Quantity | Price | |||
| Offered | Booked | Reserve | Bid | % Gain | |
| G5 | 14,000 | 14,000 | 3285 | 3639.29 | 11% |
| G6 | 48,000 | 32,950 | 3029 | 3232.64 | 7% |
| G7 | 50,000 | 18,500 | 2774 | 2774 | 0% |
| G8 | 70,000 | 70,000 | 2109 | 2663.94 | 26% |
| G11 | 1,000,000 | 816,400 | 1374 | 1400.56 | 2% |
| G12 | 221,000 | 114,850 | 1276 | 1276 | 0% |
| G13 | 15,000 | 2,000 | 1176 | 1176 | 0% |
| G14 | 21,000 | 300 | 1077 | 1077 | 0% |
| G15 | 350,000 | 25,950 | 850 | 850 | 0% |
| G16 | 111,000 | 108,550 | 725 | 725 | 0% |
| Total | 1,900,000 | 1,203,500 | 1343.13 | 1486.22 | 11% |
Source: CoalMint Research
Quantity in MnT | Prices in INR/MT
Key takeaways from the auction are listed below:
(a) An improved demand for higher GCV coal supported price realization in the auction wherein highest bid over the reserve price was noted at INR 810/MT for G8 grade of coal. While, highest bid in previous month’s auction was limited to INR 210/MT.
Bids received for lower GCV grades below G8 were recorded in the range of INR 0-100/MT over the base price. Incidentally, 66% of the total sold quantity was booked at the reserve price.
(b) G6 coal grade had received the highest bid price of INR 3669/MT as against the reserve price of INR 3029/MT, however, there was a variation seen in bids across various sources based on size depicted for the same coal.
(i) 250 mm sized coal offered from Kumda and Rehar mines had received bids in range of INR 140-640/MT over the base price.
(ii) 100 mm sized coal offered from Sharda mine was sold at the base price.
Similar price variation was seen for sales of G8 coal grade, where 250 mm sized coal had managed bids in excess of INR 700/MT over the base price, while, bids for 100 mm sized coal were in range of INR 40-90/MT.
(c) Bids received from lots which were recurred from the previous term, had garnered lesser price realization in the current auction. Incidentally, G11 coal offered from Gevra colliery was majorly sold at the base price, which had received premium of INR 120-210/MT in the previous month.
SECL’s Production Milestone:
The company has set a new landmark in terms of coal production by attaining daily output of 801,819 MT as on 18 Mar’20, thus surpassing the record set in the previous fiscal where 744,654 MT coal was produced on 25 Mar’19.
SECL is aiming higher to reach close to its annual production target of 170 MnT for FY20.
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