With limited imported coal stock at Gangavaram Port, South African RB2 (5500 kcal/kg NAR) grade coal offers rose by INR 1,500/t w-o-w to INR 23,500/t.
However, weak trade volumes impacted sentiments with sponge iron manufacturers adopting a wait-and-watch mode, and traders, on the other hand, kept to the sidelines averting offers amid limited vessel arrival from South Africa in the upcoming week.
As per CoalMint’s vessel line-up data, thermal coal shipments from South Africa are seen at 0.42 mnt from 29 April to 17 May, 2022. Majority of the shipments are made in the favour of end-users, including ArcelorMittal Nippon Steel, Rungta Mines, and ONGC Mangalore Petrochemical.
“Trading activity of imported coal has almost halted in the last two-three days as large-scale traders are also refraining from offering. With the tight supply conditions, the coal crisis scenario is set to worsen further,” a Delhi-based trader said.
RB2 portside prices this week
*Price in INR/t, excluding cess and GST
Strong demand for domestic coal
Sponge iron manufacturers continued to rush towards domestic coal, despite its scarcity as premiums of the G8 grade at NCL’s spot e-auction rose by a whopping INR 8,120/t, while that of G10 grade rose by INR 7,691/t.
*Price in rupees/t
With the sharp rise in the country’s power demand, Coal India and its subsidiaries continued to prioritise dispatches to the power sector.
Rake allotment for both the power and non-power sectors, however, continued to be scarce which resulted in drastic drop in coal consumption volume at sponge iron units.
RB1 coal prices retreat
After rising sharply over the last two weeks, RB1 (6000 kcal/kg NAR) grade coal prices retreated by $43/t w-o-w to $270/t FOB as on 27 April.
The sharp prices fall in prices came amid logistic constraints from RBCT Port and weakened procurement demand from Chinese traders with increasing imports from Russia at discounted rates. Record coal output in China this year is likely to keep its import demand weak.
Discounts for RB2 coal remained at $7/t, while for RB3 (NAR 4800 kcal/kg), discounts were was heard at $26/t.
Outlook
Despite weak imported coal prices, portside RB2 prices in India are likely to remain higher amid a domestic coal supply crunch and limited vessel arrival from South Africa.
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