South African thermal coal export prices have slightly moved up during the current week as sellers considerably reduced discounts on their offer prices, in the face of intensifying competition between multiple originating countries, particularly Australia.
With China’s ongoing port restrictions dampening seaborne demand from the country’s end-users and traders, Australian shippers have become amenable to accept discounted prices for selling their high ash Newcastle 5,500 kcal/kg NAR thermal coal into the Indian market.
Australian coal is, however, a less attractive option for Indian buyers due to its high price and energy content.
As yet, South African coal is still the most competitively priced for the Indian market, according to several trading sources.
Given its proximity to India, South African exporters are endowed with a natural advantage over Australia in terms of lesser freight rates for delivery to India.
Notably, Indian thermal coal imports from South Africa have been growing this year, comprising 23 percent of India’s coal imports so far in 2019.
Richards Bay discounts
Discounts for South African coal from the financial 6,000 kcal/kg NAR market to export grades of physical coal are at around USD 6.50/MT for the 5,500 kcal/kg NAR grade.
Discount for the 4,800 NAR grade is assessed at USD 10.50/MT.
Dry Bulk Freight Assessments
Panamax dry-bulk shipping freight rates from the Richards Bay Coal Terminal (RBCT) to the East and West Coasts of India are USD 17.45/MT and USD 17.10/MT respectively.
PRICE ASSESSMENTS
RB1 (6,000 kcal/kg NAR) coal is assessed at around USD 58.75/MT FOB Richards Bay.
RB2 (5,500 kcal/kg NAR) coal is assessed at around USD 48.81/MT FOB Richards Bay.
RB3 (4,800 kcal/kg NAR) coal is assessed at around USD 39.40/MT FOB Richards Bay.
For Indian buyers, the above offers amount to USD 76.00, 66.09 and 56.68/MT respectively, considering an average freight rate of USD 17.28/MT for delivery by Panamax vessel class.
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