Coal news and updates

Domestic coal of higher grades in less demand: Trader

December 27: The demand for domestic coal of higher grades, especially G2 and G1, from the mines of the subsidiaries of Coal India Ltd (CIL) is ruling weak because of the availability of comparable grades of imported coal at almost the same or lower price points in terms of energy efficiency, trade sources said.

"The basic price of G2 grade with GCV exceeding 6,701 Kcal/kg and up to 7,000 Kcal/kg is Rs 4,870 per ton, which does not include royalty and other charges, whereas the price of imported coal is currently at about $85 per ton FOB South Africa or Rs 5,270 per ton.
However, as there is no consistency in the quality of the domestic coal and also because of the high ash content, consumers prefer the imported variety," said a trader who buys coal from the e-auction and sells to consumers.

According to information available with ICMW, the delivered prices of the domestic above grades are pegged at anywhere between Rs 7,000-8,000 per ton, depending on the distance of the consumption point from the mines, while the delivered price of imported coal of almost the same grades comes to around Rs 7,250 per ton.

"The quality of the 'G2' and above grades of domestic coal supplied from the mines is not homogeneous while imported coal of the same grade is qualitatively better and that is why consumers of such higher grades prefer the imported material because the cost per Kcal/kg for them is lower in case of the latter," the trader said.

He feels demand for higher grades of imported coal in India is likely to go up and as such there would be increase in the overall imported quantity.