India: Limited trades amid COVID fear weighs on RB2 portside prices this week

The market for South African coal turned quiet this week as buyers retreated from making any major bookings. Lockdowns and restrictions being imposed in various states due to surging COVID cases across India, weighed on buying sentiments at ports.

While, two weeks back, South African RB2 (5500 NAR) coal portside prices touched a high of INR 7,100/t ex-Gangavaram, the same came down to INR 6,600/t this week. Prices are exclusive of cess and GST.

Lowered demand, adamant sellers

There are very limited bids from the sponge manufacturers especially in Chhattisgarh and Maharashtra amid market uncertainty looming due to COVID, whereas, unlike last year, sellers are holding their grounds and are not ready for the freefall in portside prices in the absence of demand, informed market participants.

“Nation-wide lockdown seems a bit unlikely at present and we have procured South African coal at much higher prices against last year. If we lower portside prices going with the current demand, we would incur huge losses”, quoted a reputed trader based in Delhi.

After Adani Ports took over Gangavaram port last month, handling and lightning charges have been increased whereas no.of free days have been reduced, deterring many importers to bring in their cargoes at Gangavaram port. On the other hand, mid and small-sized traders have already sold off their majority stocks and emptied their plots.

“Since past few days, I am getting offers only from Adani Enterprise and Agarwal Coal, whereas none of the big importers have their stocks available at Gangavaram”, quoted a sponge manufacturer based in Raipur.

Vessels arriving at Indian ports

CoalMint’s vessel line-up reveals about 1.35 mn t of South African coal coming to India, with only 0.16 mn t of coal vessel coming up at Gangavaram port that too of JSPL. The highest quantity of 0.32 mn t is arriving at Dhamra port followed by 0.24 mn t at Kandla port. In rest of the ports, majority, end-users vessels are arriving, and traders share is quite minimal.

RB2 prices at other ports

At Vizag port, currently only Tata International is offering RB2 coal at INR 7,000/t although bids there are quite limited whereas at Mangalore port, no offers are being heard as majority stocks have been sold out.

South African coal

API4 index remained almost stable in the range of $94-95/t this week whereas discounts remained same as last week, RB2 at $15/t and RB3 at $25/t. The freight between RBCT to Gangavaram port for capsize vessel has been assessed at $15/t this week.