Indian buyers were provided a sigh of relief as the strike announced by NUM was postponed for the time being. The South African workers’ union, NUM, had decided go on an indefinite strike starting from 19 Nov’17.
The strike activity if taken place, would have affected half of the coal production in the country, however, NUM put hold on the strike after some coal producers had agreed upon increasing workers’ wages.
Still the imminent danger of the strike cannot be ruled out, as NUM remained firm on its demand of a centralized wage agreement instead of accepting offers on a mine-by-mine basis. The due course of action would be finalized when NUM members and the coal producers will meet again on 20 Nov’17.
On the price front,South African coal price index continued to decline, unfazed by the prospect of strike. Market participants had reported that the ample of coal stock available at Richards Bay coal terminal had put downward pressure on coal index price, when coal buying was relatively slow.
Coal price index API-4 came down to USD 91-92 levels and was assessed at USD 91.65 yesterday.
Indian buyers were in need for South African cargoes due to the supply regulation affected by CIL to Non-power sectors including Sponge iron manufacturers. However, despite the recent fall in index price, coal demand had been narrowed, as coal prices were still too high for them.
South African 5500 NAR coal was assessed at USD 75-76/MT, FoB Richards Bay. While 4800 NAR coal was offered at USD 62-63/MT, FOB Richards Bay.
The news of NUM cancelling strike would definitely come good to Indian buyers, which was also greeted by CIL’s record dispatch of 250 coal rakes in a single day. CIL in collaboration with Railways is now working to enhance loading target to 266 rakes per day which will further help both power and non-power sector in meeting their demands for coal.
The move by CIL would not only end Non power sectors’ coal shortage but also reduce cost incurred on coal imports.
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