The South African thermal coal prices continue to plunge further this week amid the market disruptions caused by Wuhan virus outbreak globally.
India which is a key buyer of South African non-coking coal is currently facing demand slack from its sponge iron sector. According to the market sources, the rising cases of Cornoavirus outbreak globally has put the entire steel sector under pressure. In China, steel output might outpace the receding steel consumption demand, resulting in an inventory pile-up and pricing pressures.
The demand-supply imbalance could also aggravate further if the virus outbreak in other large steel-producing countries such as Japan, South Korea, India, and the U.S. worsens. It is likely that up till May the situation may remain grim and demand-supply imbalance will cause inventory pileup.
Apart from this, March is a closing month for Indian fiscal year and manufacturers focuses on selling off their inventories in order to have cleaner records towards the year end resulting which there is no buying interest of thermal coal from Indian sponge buyers over past few weeks.
In other countries like Pakistan and Vietnam which are also key buyers of South African thermal coal steel demand is under pressure resulting which buying interest for South African thermal coal is quite limited.
The current prices for RB2 grade South African thermal coal are currently being heard in the range of USD 64-66/MT, CNF basis whereas that of RB3 is in the range of USD 54-56/MT CNF India basis, down by USD 7-8/MT w-o-w basis. The fright charges from South Africa to India for capsize vessel has dropped down to around USD 8-9/MT and that of panamax it is around USD 11/MT. The stock and sale price of South African thermal coal at India’s Gangavaram port is heard to be around INR 5,700/MT and at Krishnapatnam port it is around INR 5,900-6,000/MT.
Leave a Reply