Portside offers for RB2 grade coal in Krishnapatnam remains inflated despite drop at other ports

Key highlights

• Last week, portside prices of South African RB2 (5500 kcal/kg NAR) grade thermal coal at Indian ports observed a rebound of INR 300-400/t amid an uptick in API4 index prices.
• However, towards the weekend, index fell by $2.5/t. Subsequently Indian buyers bargained with the suppliers to lower the portside RB2 rates resulting in no major deals being concluded.
• The ongoing week started on a grim note with index falling further and portside offers at various ports dropping by INR 300-400/t.
• Contrastingly, portside thermal coal prices at Krishnapatnam port have remained at elevated levels similar to last week.

RB2 prices at the ports below:

*Prices are exclusive of cess and GST

What is supporting prices at Krishnapatnam port?

According to the market participants, reduced stock and Adani Ports and Special Economic Zone (APSEZ) completing takeover of Krishnapatnam port is supporting portside prices for thermal coal there.

Amongst all the major ports, thermal coal stock at Krishnaptnam port has reduced at highest rate of 15% in last ten days, with stock being reported at 1.56 mn t as on 1 Oct’30.

“Adani has completed acquisition of  Krishnapatnam port resulting which market participants are anticipating a hike in plot rent and handling charge for coal. This will make portside coal prices to rise further, making buyers to make advance booking (despite the requirements) and supporting the prices”, quoted a reputed trader at Krishnapatnam port.

APSEZ has completed acquisition of Krishnapatnam port (KPCL) for INR 12,000 crore and will have controlling stake of 75%.

KPCL is multi-cargo facility situated in southern part of Andhra Pradesh state which is second largest coastline in India.