CIL e-auction sale up 77% in Apr-Nov; non-power sector continues to show more appetite

• The upsurge in the booked or allocated quantity of coal was close to 30 MT in absolute terms, compared to 38.6 MT booked during the same period a year ago

• Indicating increased appetite from non-power consumers, exclusive auction for this sector booked 17.4 MT, which is 25.5 percent of the total allocated quantity

New Delhi: Coal India Limited (CIL) has logged a strong 77 percent growth in e-auction sales in April-November of the ongoing fiscal under five windows, booking 68.3 Million Tonnes (MT), said the coal miner in an official statement on Thursday. The upsurge in the booked or allocated quantity of coal was close to 30 MT in absolute terms, compared to 38.6 MT booked during the same period a year ago. Indicating increased appetite from non-power consumers, exclusive auction for this sector booked 17.4 MT, which is 25.5 percent of the total allocated quantity during the referred period. Compared to 4.8 MT booked by non-power consumers during April-November 2019, the growth is more than a three-and-a-half fold or 262 percent. 

E-auction sales for November not only witnessed improved volume bookings at 9.4 MT, clocking 23.7 percent growth over last November, but CIL could also net 30 percent premium over the notified prices. This is a big leap from 13 percent premium the auctions fetched in October when CIL for the first time in the present fiscal introduced add-on over the notified price, after a six-month hiatus, to gauge the market response.

Bookings under e-auctions could go over 100 MT

Considering the market response to e-auctions, there is a strong possibility that the bookings could go over 100 MT in the current fiscal. Special spot auction for coal importers also gained positive response with 3.3 MT booked in November with a premium of 21 percent. The quantity is twice that of 1.6 MT booked in October, the first occasion CIL introduced this window, when the premium fetched over notified price was 14 percent.  

"For now, the focus remains on volume expansion in e-auction sales rather than add-ons over the reserve price. Going forward, add-ons will be pliable based on subsidiary-wise and grade-wise demand," said a senior executive of the company. 

Coal India looks to non-power sector to bolster revenues

Given the power sector's 80 percent share in CIL's total off-take programme it will not be feasible for non-power sector to offset demand shortfall from the power sector fully. However, the demand from non-power sector is on the rise and there is scope for further growth. 

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Till the demand from the power sector strengthens and stabilises, CIL is eyeing sponge iron, CPPs, Cement and Aluminum sectors etc with a two-fold aim. To ramp up volume despatches and substitute imported coal with domestic coal. CIL has communicated with over 300 coal importers, seeking their requirement from domestic sources. The international coal prices charting an upward trajectory in the last fortnight could offer CIL an opening.  

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