Portside prices of South African RB2 (5500 NAR grade) coal rose by INR 800-1,000/tonne (t) this week and by 13% since the beginning of the month. Prices remained elevated as the stock at Indian ports has reduced significantly and very limited quantity is coming from South Africa in the upcoming month.
RB2 portside prices this week
Prices in INR/t, ex-cess and GST
The above table shows that thermal coal stock at Gangavaram Port, which receives the highest quantity of S.African coal, has declined by 27% m-o-m basis and hardly any stock is left at the port. In other ports like Haldia, Paradip and Vizag, the situation is more or less the same after a few deals concluded this week.
Buyers’ sentiments
Demand for S.African coal from the sponge iron sector continues to remain sluggish given the weak demand from the end-user segment. However, by next month, it is expected that sponge iron prices would see a rise due to coal supply crunch, as the vessel arrival from South Africa is also quite limited.
According to vessel-lineup data with CoalMint, only 0.60 million tonnes (mn t) of thermal coal is arriving from S.Africa between 20 Dec’21-23 Jan’22, down by 49% m-o-m.
South African coal prices rise
RB1 (6000 NAR grade) coal prices rose further to $145/t for Jan’22, up by $6/t w-o-w. The coal stock at RBCT port has touched a record low of 1.86 mn t this week against an average of 5 mn t.
The logistic disruptions caused by poor maintenance of Transnet rail lines, cable theft, and financial hurdles continue to hamper coal supplies from mines to RBCT port.
The discounts for RB2 and RB3 were assessed at $12/t and $21/t respectively for January-loading shipments.
Short-term outlook
CoalMint believes, portside RB2 prices are likely to rise further amidst very little stock at Indian ports, elevated imported coal prices and limited vessel arrival from South Africa.
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