India: Portside South African RB2 grade coal prices move up as API4 index rebounds

The past few days have brought some respite to South African thermal coal sellers in India that had been carrying out domestic trade even at a loss.

• The portside RB2 (5500 kcal/kg NAR) prices have increase by around INR 150-200/t w-o-w basis. Among several confirmed deals heard by CoalMint, about 2,000 tonne RB2 has been sold at INR 4,800/t (ex-Gangavaram) whereas in another deal, the same grade of coal has been sold at INR 4,600/t.
• Market participants have confirmed that prices are varying depending upon the recentness of the material received (latest stock is sold at higher price). However, the price of RB2 is ranging between INR 4,600-4,750/t ex-Gangavaram.
• At Haldia port, a trade for 25,000 tonne RB2 coal was heard at INR 5,800/t, and another 3,000 tonne trade confirmed at INR 5,700/t.
• At Kirshnapatnam port, RB2 prices are assessed at INR 4,800-4,900/t. Whereas, the RB2 prices ex-Paradip are at INR 5,500/t. All the prices are exclusive of cess and GST.

This increase in portside prices can be being attributed to rising API4 index prices that has recorded an increase of 12% m-o-m basis and is currently trending at $65.3/t.

While there is no significant improvement in sponge iron demand, its prices are increasing on higher iron ore and pellet prices.

In Raipur market, P-DRI (pellet-based sponge) prices are currently being assessed at INR 22,700-22,800/t whereas C-DRI  (lump-based sponge) prices are assessed at INR 23,900/t (ex-Raipur).

Indian ports’ thermal coal stock rises by 17% w-o-w

Thermal coal stock at Indian ports in Week 45 (as on 8 Nov) stood at 17.2 mn t, up by 17% m-o-m basis and up by 50% against same period last year.

Thermal coal stock at key ports

Qty in mn t
*NA: Data not available

The above data shows that except for Ganagavram port, thermal coal stock at other ports have increased multi-fold y-o-y basis in week 45. On w-o-w basis, the highest increase is seen at Navlakhi port with Agarwal Coal and Adani Enterprise having highest stock at 0.62 and 0.43 mnt respectively.

The highest thermal coal stock among end-users is held by Adani Power at 2. 75 mn t. Whereas, in the case of traders, Adani Enterprise hold the highest stock at 1.33 mn t (at various Indian ports).

Outlook ahead

We expect portside trade to remain dull in the current week due to Diwali holidays. However, once the participants return to the market, RB2 prices should get some support as a further rise in API4 index is being anticipated on growing supply concerns from South Africa.