CIL’s auction bookings spiked 29 % between April and July as global coal prices skyrocketed

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Coal India (CIL NSE 0.63 percent) increased its e-auction net sales by 87 percent to Rs 4,700 crore in the first quarter of the current fiscal year, owing to an increase in international coal prices. During the first quarter of fiscal year, the company recorded e-auction sales of 30.2 million tonnes (MTs). As of the first quarter of previous fiscal year, auction sales were down at 15.9 MTs due to the pandemic slowdown, according to a business statement.

CIL’s e-auction allocation of 35.5 million tonnes (MTs) during April-July’21, under five auction categories, increased by over 8 million tonnes (MTs), representing a 28.6 percent rise over the same time last year.

“With international coal prices spiraling upwards with no signs of let up, consumer preference for domestic coal is seemingly gaining ground,” the statement said.

The country’s coal importers booked 70% of the total quantity of 2.4 MTs provided to them under their special spot e-auction during April-July’21, demonstrating the impact of rising coal prices obtained from overseas. It stated that the add-on over the notified price in this category was 52 percent.

Almost all of the 1.6 MTs given to coal importers under an exclusive special e-auction window in July 21 was booked. During the first four months of the current fiscal, the allocation under exclusive auction for non-power consumers was 11.8 MTs, representing a 69 percent increase. They booked 7 MTs at the same period last year. During the mentioned period, the power sector grew by 37.5 percent at 11 MTs under a special forward auction. In the same period last year, this sector booked 8 MTs of cargo.CIL allotted a total volume of 8.3 MTs in July 21 compared to 5.8 MTs in June 21. This is a month-on-month increase of 2.5 MTs. In a month, the number of auction bookings increased by 43%. The allocation increased by 9% over July of the previous year.

With a rebound in coal sales, premiums over notified value are improving. The company’s bottom line would benefit from increased volume sales combined with add-ons, according to the statement.