South African coal index prices have remained range bound, between USD 93-95 this week. After reaching a high of USD 95 last week, prices have fallen slightly.
Index price had risen by USD 3-4 on the threat of a potential strike to be held by the workers union demanding wage revision, since then prices have been falling and were assessed at USD 93.35 yesterday.
With the ongoing negotiation between National Union of Mineworkers (NUM) and major coal producers having collapsed, the union has decided to go on an official strike.
The date of the planned strike activity has not yet been notified, however the union has informed that they have received the requisite certificate to carry on the strike by the Commission for Conciliation, Meditation and Arbitration (CCMA).
The strike activity taking place would affect the entire South African coal production. As five major coal producers are members of Chamber of mines with which negotiations were ongoing.
Given many miners ran out of coal during this time of year, discounts on Coal prices had already been lowered. 5500 NAR coal was offered at a discount of USD 8.5-9/MT on index price, whereas 4800 NAR coal was available at an discount of USD14/MT.
South African 5500 NAR coal is assessed at USD 77-78/MT, FoB Richards Bay. 4800 NAR coal is offered at USD 63-64/MT, FoB Richards Bay.
Indian Market Scenario:
Indian buying has slowed down as many consumers have stocked enough coal as per their requirement. Sponge manufacturers particularly were in a buying spree as they had waited long for the monsoon period to end, and due to the coal supply shortage for Non-power consumers.
Many cement manufacturers may also turn to the South African coal market given the possible ban on Petcoke, which is yet to be finalized.
Current Offer for 5500 NAR coal is heard at USD 90-91/MT, CFR India. 4800 NAR coal is available at USD 76-77/MT, CFR India.
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