NSEL launches delivery-based coal contracts on its electronic platform

National Spot Exchange Ltd (NSEL), the pan-India electronic spot market for commodities, reported its first trade of 3,000 MT of imported coal on its electronic platform on Friday.

The exchange, promoted by the Financial Technologies group, recently launched delivery-based imported coal contracts, having delivery on ex-port location, Mangalore.

The deal marks the beginning of a new era of electronic transparent trading mechanism for organising trade in imported coal, facilitating power companies, cement producers, sponge iron manufacturers, sugar mills and other industries to source imported coal electronically through the NSEL platform.

It will also enable large coal importers to sell the imported commodity directly to end users without involving any intermediary. Last financial year, India imported 99 million metric tonnes (MMT) of coal, 44 per cent higher than in the previous fiscal.

With the domestic production stagnating, demand for coal is expected to soar, resulting in a gap of nearly 150 MMT. The NSEL estimates that if the average price is Rs7,000 a metric tonne, the imported coal business would add up to more than Rs1 trillion a year.

''We are committed to carry out structural reforms in the physical trade across various commodities, be it agricultural commodities, metals, energy or any other stuff, which is deliverable in India,'' says Anjani Sinha, managing director and CEO, NSEL. ''The idea is to develop a seamless and risk-free marketplace, which can be relied upon by a large number of buyers and sellers.''