According to the vessel line-up data compiled by CoalMint research, coal shipments from RBCT (Richards Bay Coal Terminal) have decreased 18% on the month to 5.35 MnT in Jul’18 against 6.51 MnT in Jun’18. Besides, shipments were also down 19% on the yearly basis from 6.61 MnT in Jul’17.
South African coal had fallen out of favour among the Indian buyers as they had already stocked adequate coal in reserve for the monsoon season, which had ultimately affected India’s coal sourcing from RBCT during the month.
Indian coal import from RBCT had fell 22% M-o-M to 3.20 MnT in Jul’18, compared with 4.11 MnT in Jun’18.
Other major importers of the likes of Pakistan, Sri Lanka and Spain, had also witnessed a fall in monthly coal sourcing from RBCT in Jul’18. South Korea, Taiwan and Netherlands had not purchased any coal shipment from RBCT during the month.
UAE emerged as the third-largest coal importer from RBCT, behind Pakistan. The country had witnessed an increase of 89% in monthly imports to secure 0.21 MnT coal in Jul’18.
The fall in coal demand weighted down RBCT’s monthly shipments which had dropped to its lowest total since Feb’17, and have also resulted in significant correction in coal offers.
South African coal index API-4, has been drifting down in the recent months since touching its yearly high of USD 109, was assessed at USD 103 as on 6 Aug’18. Market participants have informed that a discount of USD 9-9.5/MT was available on 5500 NAR coal, which was offered at USD 86-87/MT on FoB basis.
The descending coal offers is likely to initiate higher coal buying, particularly from the Indian buyers who would be looking to replenish their coal stocks after the monsoons. Moreover, a shortfall in domestic coal supply for non-power sector would also encourage Indian buyers to import more coal.
Recently, domestic coal miner MCL has planned a way to keep non-power sector’s supply intact by asking them to lift 75% of the monthly quota of coal supplies via Rail mode and the remaining 25% via Road mode for the month of Aug’18. However, there remains several factors viz. hydro-power output, CIL’s coal production and dispatch, which would govern India’s import demand from RBCT.
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