Coal India is planning to raise Coal prices by 10% because of anticipation of quantity cut in e-auction by 50%, which ensure optimum availability to power plants.
A discussion was held in the last CIL’s board meeting to reduce the quantity via e-auction by 50%, as directed by the Coal Ministry. However, the board is yet to take the decision. In the meeting, the board said Coal prices will rationalize if there will be reduction in e-auction quantity by 50%.
Sponge iron manufacturers seek for imported Coal
Sponge iron manufacturers in India, who contribute around 3%total sales of CIL, are struggling with Coal supply crunch and price hike in the domestic market. It was assessed that demand for imported Coal has significantly increased in last few months. Rise in auction prices for domestic Coal and reduced Coal linkage for Sponge iron manufacturers have forced them to go for imports. South African Coal is most preferable grade Coal because of controlled moisture and volatile matter, so most of the Sponge manufacturers are importing it.
An arrival of a capsize vessel from South Africa’s Richard bay is expected at Gangavaram port in mid-August. Currently, South African RB2 prices are hovering in the range of about USD 75-76/MT CNF with 53% FC. Landed cost including customs duty and handling charges at port will be at around INR 5,300-5,400/MT in Gangavaram port for September delivery.