CIL allocates 30% less coal under spot e-auction in Nov

The decline comes amid the govt's goal of securing availability of coal for various sectors

State-owned Coal India Ltd (CIL) allocated 3.1 million tonnes (MT) of coal under spot e-auction in November 2016, down 29.5 per cent from the year-ago period.

The decline comes amid the government's goal of securing the availability of coal to meet the demand of various sectors, including power.

CIL had allocated 4.4 MT in November 2015, government data said.

During the April-November period of the ongoing financial year, CIL has allocated 36.8 MT of the fuel as against 36.5 MT in the same period of the previous financial year, the data said.

According to PWC's Kameswara Rao, the volumes traded on e-auction are small, and down-side price movements tend to get magnified when larger core demand is being satisfactorily met.

Buyers get confidence that coal producers are capable of stepping in to meet any spurt in demand and so place lesser premium on short-term purchases. This also coincides with lower demand from both power producers and the industry, he said.

"However, as demand picks up, and with global prices at nearly double that of last year, auction prices would firm up in coming quarters," he added.

Under e-auction, coal is sold at spot market price.

CIL had introduced the Spot e-Auction Scheme 2007 for facilitating the country wide-ranging access to book coal online for all sections of coal buyers, enabling them to buy coal through a simple, transparent and consumer-friendly system of marketing and distribution of coal.

CIL accounts for over 80 per cent of the domestic coal production and is eyeing 1 billion tonnes in production by 2020. The PSU is eyeing 598 MT in 2016-17.