Companies

Coal India may cut prices of top grades

Pratim Ranjan Bose Kolkata | Updated on March 12, 2018 Published on March 18, 2013

While global prices softened over the last year, CIL is now being criticised for not revising the prices of top quality domestic coal.   -  THE HINDU

Linked to softening of global prices

State-owned Coal India Ltd may cut the prices of top grades of thermal coal, with calorific value of over 6,100 kilocalories (kcal) per kg, according to sources. All four grades are linked to the import parity price.

Prices of other grades between 5,500 kcal and 6,100 kcal — also linked to landed cost of imports — may not see much revision.

Available in limited quantities (25 million tonnes), these varieties are mostly sold to sectors such as cement, and iron and steel.

In 2011, during the switchover to sales based on GCV (gross calorific value), the company fixed the prices of the six top grades based on the prevailing high global prices in December 2011.

Difficult to verify

While global prices softened over the last year, CIL is now being criticised for not revising the prices of top quality domestic coal, making these varieties costlier.

The claims are difficult to verify, as India does not import too many different grades. Also, the high quality coal (6,000 net calorific value) imported from South Africa is low in ash content but high in sulphur, making it unsuitable for most power plants in India. There are weaknesses on the part of CIL too. While the top quality imported coal is sold on the basis of net calorific value (net as received), Indian coal is unwashed and offers a lower heat value than quoted.

While CIL officials are tight-lipped on pricing issues, sources suggest that the company is considering reducing prices of at least four grades according to the ruling global average.

Price rise for low grades?

CIL is believed to have taken a cue from the March 7 price revision of Singareni Collieries (SCCL). Owned jointly by the Andhra Pradesh Government and the Centre, SCCL priced its top four grades between Rs 3,336 and Rs 3,896 a tonne. In contrast, CIL prices are higher at Rs 3,970-5,095 a tonne.

But such pricing has also thrown open the possibility for CIL to escalate the prices of inferior quality coal.

SCCL prices 13 grades from 2,200 kcal to 6,100 kcal at Rs 420-3,319 a tonne. This is substantially higher than the CIL price range of Rs 360-2,800 a tonne for similar varieties.

>pratim.bose@thehindu.co.in

Published on March 18, 2013
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