Reflecting a gradual sign of improvement in demand, the spot auction conducted by South Eastern Coalfields Ltd (SECL) attained a fiscal high premium against price realization for coal sales in Dec ’20.
Coal offered in the auction held on 8 Dec ’20 was reduced by half to 700,000 t of which 325,400 t was sold at an average bid price of INR 1659.12/t, thereby gaining a premium of 32% over the assessed notified price of INR 1255.59/t.
The auction envisaged a hike of INR 10/t in notified price introduced recently by CIL, but that didn’t affected the continual growth in terms of premium received for the sale, besides a rise was also recorded in price realization m-o-m as it increased 12% from INR 1474.94/t in Nov ’20.
Key findings:
Highest bid price of 4075.25/t was received for G5 grade offered from Rajgamar colliery. On the other hand, same grade offered from Haldibari was procured at the base price. (Detailed source-wise result can be seen here).
Quantity in Metric Tonne (t) | Prices in INR/t
Company’s offering of G8 grade of coal after a gap of one month received overwhelming response from the buyers as it fetched superior premium among the rest of the lot.
Sale from Rehar colliery attracted gain of INR 914/t over the reserve price of INR 2121/t, which also marked a progression from the previous month’s auction wherein the highest premium was noted at INR 543/t.
In the lower tier, apart from G11 coal which was offered in a single lot from Dipka colliery, not much resilience was seen for other coal grades.
Failing to sale even half of the coal volume in the auction can be an area of concern for the company whose total production has dropped by 6% y-o-y in the first 8 months of current fiscal. However, improved performance in terms of pricing should encourage it to raise the output for the remainder period.
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