Portside prices of South African RB2 (5500 NAR grade) coal rose by INR 600/tonne (t) this week in tandem with a sharp rise in South African thermal coal prices.
RB2 portside prices this week
Prices in INR/t, ex-cess and GST
What has led to a rise in imported coal prices?
RB1 (6000 NAR grade) coal prices rose to $143/t as on 16 Dec’21, up by $13/t w-o-w. This came against the backdrop of limited stock at RBCT Port amidst logistic disruptions such as poor maintenance of Transnet rail lines, cable theft, and financial hurdles.
Limited coal transport has dried down inventory at RBCT Port to the tune of 2 million tonnes (mn t) against an average of 5 mn t.
The discounts for RB2 and RB3 were assessed at $12/t and $24/t respectively for January loading.
Indian sponge iron makers take a backseat
With the rise in portside prices, Indian sponge iron manufacturers moved to the sidelines to assess the market situation before making any major booking this week.
Despite offers rising up to INR 11,200/t at Gangavaram Port, bids from the sponge iron sector remained lower at INR 10,500/t, informed market participants.
“Buyers are avoiding any major booking as they have already purchased the material last week when prices touched INR 9,800/t levels while a few are heard to be delaying bookings in an anticipation of a fall in prices,” a Delhi-based trader said.
Limited coal stock at major ports also fuelled the rise in portside prices. As per CoalMint’s data, thermal coal stock at Gangavaram Port for week 50 (5-9 Dec’21) fell by 4% w-o-w to 1.2 mn t.
Stock levels at the port have been in a downtrend since Oct’21 amid limited vessel arrivals due to significant volatility in imported coal prices.
Sponge iron prices have also risen by INR 1,000/t w-o-w with P-DRI prices currently being assessed at INR 28,900/t ex-Raipur. This rise comes in line with a slight improvement in steel demand sentiments and also due to an increase of INR 700/t in pellet prices this week.
Portside trade deals concluded
In various confirmed deals collected by CoalMint between 13-17 Dec’21, a total of 50,000 t of RB2 was traded at an average price of INR 10,800/t, ex-Gangavaram.
Short-term outlook
CoalMint believes, portside RB2 prices are likely to remain supported amid the rising trajectory of imported prices and limited vessel arrival from South Africa in the upcoming week.
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