Key highlights
- African RB2 grade thermal coal offers to India that moved up last week has now inched down by $1-2/t w-o-w basis.
- The current offers for 5500 kcal/kg NAR thermal coal is assessed at $59-60/t (offers at Haldia port are at around $64-64/t). Whereas, for RB3 (4800 kcal/kg NAR) coal offers are at $45-46/t, CFR India basis for October loading.
- The discounts for RB2 coal is between $9-9.25/t and for RB3 is around $15/t. The freight between RBCT to Indian ports is assessed at around $12.5-13/t.
Indian market sentiments
In conversation with various market participants from both buyers and sellers’ side, we learned that at present the buyers have the bargaining power amid sufficient stock at ports.
“Indian thermal coal buyers that made a few panic purchases last week when the coal index moved up, have now taken a waiting position in anticipation of a further price fall. Buyers especially in the cement sector will need thermal coal post Diwali and thus are not in a hurry to make bookings. Moreover, there is sufficient stock available at Indian ports which is further tilting the market towards the buyers”, quoted a reputed trader based in Northern India.
Stock data maintained with CoalMint reveals that as on 1 Oct’20, thermal coal stock at Indian ports stood at around 14.3 mn t against 11.4 mn t around same time last year.
Thermal coal demand from the sponge iron sector is also not showing any significant signs of improvement as both imported and domestic scrap prices have fallen (scrap and sponge iron are used as an alternatives) due to which South African coal prices is not finding any support in India.
Portside offers at Indian ports
| Ex-port |
Prices in INR/t |
| Gangavarm |
4,600 |
| Krishnapatnam |
4,950 |
| Haldia |
5,500-5,600 |
| Paradip |
4,900 |
*Prices are exclusive of cess and GST
While there is a mixed opinion in the market with regards to future prices, the majority believe that S.African coal offers to India would see a further decline in the upcoming week as no major change in demand seems likely and stock at port also remains sufficient.
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