South African thermal coal offers have been maintaining a range-bound trend since Jul’16, at the level of USD 64-66/MT, FoB.
After a remarkable recovery of South African coal prices which have recorded about 21 months highest, now reflecting a range bound trend over the last three months. While South African coal (6000 NAR) offers have been hovering at the range of USD 64-66/MT, FoB Richard’s Bay.
South African coal offers are more or less firm, 5500 NAR coal is being offered at USD 63-64/MT, CFR India. While, low GCV South African RB3 (4800 NAR) is available at USD 52-53/MT, CFR India. High CV 6000 NAR coal, barely traded in India is assessed at USD 73-74/MT, CFR India.
Although, the sharp hike in South African coal prices does not reveal any fundamental reason behind it.
As per market participants, South African 5500 NAR coal offers are still higher at USD 64/MT CFR India for Sep’16 loadings. But, Indian buyers expectation are bit lower, currently heard that an Indian deal got concluded at USD 61/MT, CFR West Coast. On the current scenario, prices are on the higher level which is expected to sustain this year.
A domestic trader mentioned, “High priced imported South African coal not providing viability to Indian sponge units. However domestic buyers are shifting towards Indigenous coal rather than opting for expensive imported grades.”
Stock and Sale Offers at Ports
India’s stock & sale coal prices at different ports have also turned up sharply in last one month owing to lack of stock level along with high global offers. Continuous up trend have prompted traders to come out with comparatively higher offers.
Stock and sell material offers for RB2 is almost sold out by Indian traders and presently very less quantity is available at India ports. The material 5500 NAR and 4800 NAR is offered at INR 5,200/MT and INR 4,500/MT (all duties and clearance included, VAT & CST will be added further) at Paradip and Kandla ports respectively.
Indian Imports
As per SteelMint data analysis, India have been importing at an average about 3.7 MnT coal from South Africa per month since Feb’16. Whilst, in Aug’16 monthly imports have fallen by 23% to 2.3 MnT compared to Jul’16. It is also noted that Indian import will go down more if prices will sustain on the given level.
Moreover, high offers with increased sea freight does not seems viable for Indian sponge units to go for higher priced imported material. While, traders and end-users both are hoping for market stability which will make feasibility on trade.
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