Coal prices in South Africa have maintained firmness over sustained demand from India. On the back of domestic coal shortage, Indian buyers especially the Non-power sector have been aggressively looking for South African coal to meet their demand.
In order to build back the coal stock at the Indian power plants, the preference given by CIL to supply coal to power stations had kept Non-power coal consumers at bay, which had to fulfill their coal needs from South Africa. It is expected that the current situation will continue to support the coal prices.
Although South African coal market have seen minor changes from the previous week, the prices have gone up by USD 2/MT from the previous month.
Coal Prices have also been increasing on account of the miners’ obligations to gain higher price in export tenders. Market participants had anticipated that many coal producers in the country were releasing lesser coal into the open market, in order to gain prices in the Korean tenders which are floated during this part of the year.
Recently, Korea Western Power Co. (KOWEPO) had closed its tender requiring South African coal on 18 Jan’18.
Moreover, coal supply has also tightened because of the congestion at the port. Market participants have predicted that the coal prices will remain firm under the influence of the above mentioned factors.
Discount on South African 5500 NAR coal was heard USD 8.5/MT on ApI-4 index, while 4800 NAR coal was offered at a discount of USD 13.5/MT. Index price API-4 was assessed at USD 97.45. Accordingly South African 5500 NAR coal price was assessed at USD 82/MT, FOB Richards Bay. Whereas 4800 NAR coal prices was USD 67-68/MT, FoB Richards Bay.
Indian Market Scenario:
A coal trader based at east coast had reported strong demand for RB3 (4800 NAR) coal, as the coal price of 5500 NAR coal had reached USD 95/MT, CFR India; hence was not viable at the time being.
While, offer for 4800 NAR coal was heard at USD 67-68/MT, CFR India.
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