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

Resource Digest - - CONTENTS -

State-owned Coal In­dia Ltd (CIL) had al­lo­cated 3.1 mil­lion tonnes of coal un­der spot e-auc­tion in Novem­ber 2016, down 29.5 per cent from the year-ago pe­riod. The de­cline comes amid gov­ern­ment’s goal of se­cur­ing avail­abil­ity of coal to meet the de­mand of var­i­ous sec­tors, in­clud­ing power.

Ac­cord­ing to gov­ern­ment data, CIL had al­lo­cated 4.4 mt in Novem­ber 2015.

Dur­ing April-novem­ber pe­riod of the on­go­ing fis­cal, CIL has al­lo­cated 36.8 mt of the fuel against 36.5 mt in the same pe­riod of the pre­vi­ous fis­cal, the data said.

Ac­cord­ing to PWC’S Kameswara Rao, the vol­umes traded on e-auc­tion are small, and down­side 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 to en­able coal buy­ers to buy coal through a sim­ple, trans­par­ent and con­sumer-friendly sys­tem of mar­ket­ing and dis­tri­bu­tion of coal.

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

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