The South African thermal coal market is witnessing growing demand from India after weeks of prolonged down surge, as buyers look to replenish stock levels ahead of the monsoon season, which is reducing the discounts issued by the sellers.
However, Indian traders stated that supply of South African thermal coal cargoes is quite tight as Eskom, the country’s electricity public utility, was heard to have ramped up coal procurement as of late.
Meanwhile, there is no availability for South African 4,800 kcal/kg NAR grade, in particular.
Notably, the South African 6,000 kcal/kg NAR coal export market has been following a declining trajectory throughout the whole year so far in concurrence with subdued buying interest from key international markets.
The latest API 4 index for coal exported from South Africa’s Richards Bay terminal has further retreated to USD 70.95/MT, down 26.3% from USD 96.25/MT on 1 Jan’19.
At present, US-origin thermal coal is increasingly being sought by the Indian buyers — especially because prolonged higher pricings of South African thermal coals had impacted import demand from South Asian countries like India and Pakistan.
PRICE ASSESSMENTS
RB1 (6,000 kcal/kg NAR) coal is assessed at around USD 70/MT FOB Richards Bay South Africa.
RB2 (5,500 kcal/kg NAR) coal is assessed in the range of USD 57-59/MT FOB Richards Bay.
RB3 (4,800 kcal/kg NAR) coal is assessed in the range of USD 45-47/MT FOB Richards Bay.
For Indian buyers, the above offers amount to USD 83, 71 and 59/MT respectively, after charging an average freight rate of USD 13/MT for Panamax vessel class.
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