Coal India sees a 3x surge in October e-auction volumes at 17 mn tonnes

The company said the spike is due to increased demand from the power sector and several unstructured coal buyers

State-owned miner Coal India (CIL) witnessed a record 190 per cent increase in the volume of coal booked through its e-auction in October, on the back of increased demand from the power sector and several unstructured coal buyers.

It booked 16.8 million tonnes (mt) of coal in October, compared to 5.8 mt in the corresponding month last year. 

During the first seven months of the current financial year (FY21), the firm booked 59 mt of coal in e-auctions, a growth of 90 per cent over the corresponding period last year.

In July, CIL launched a special category of e-auction for companies and traders which import coal to meet their requirements. Under this, 1.6 mt of coal was booked. 

“The steep growth bodes well for CIL as it signals strong demand resumption for coal after a Covid-19-led hiatus,” said a company statement.

Apart from long-term fuel supply agreements with power plants and several non-power companies, CIL also periodically holds e-auctions of coal for several industries.

In the special forward e-auction for the power sector, 6.5 mt was booked in October, compared to 2 mt in September.  The volume booked by the unstructured coal market, consisting of consumers and traders having no direct access to coal, was 5.4 mt. It was 2.4 mt in September.

CIL fetched a 13 per cent increase over the notified price for the coal auctioned during October. In the special spot auction for coal importers, the premium received was 14 per cent over the notified value.

The company said till October this year, it has earned a premium of 10 per cent over the notified price.

With the onset of the Covid-19 pandemic, CIL brought down the reserve price of auctioned coal close to zero during the first half of FY21. 

In October, CIL introduced an add-on ranging from zero to a maximum of 10 per cent over the notified price to test the market trend, said a company executive.

“From November, we have reverted to the pre-Covid status where subsidiaries of CIL will determine their own add-ons. We are confident of stable auction sales and increased premiums in the ensuing months,” said the executive.   The company is planning to focus more on the non-power segment as power plants have a comfortable supply situation.

Given the excessive coal stock available with CIL, the Ministry of Coal also recently approved the company’s plan to supply 100 per cent of the normative requirement of the thermal power units.