Australian & South African Steam coal CFR offers uptick by USD 2-3/MT in current week on the backdrop of increased vessel freight and improved demand in the global market.
South African 5500 NAR (RB-2) coal is being assessed at USD 74/MT and USD 76/MT CFR India in Capesize & Panmax vessel respectively at East Coast of India. Coal is offered for November deliveries based on quantity and unload port.
Market participants mentioned global prices have moved up because of restocking in Europe before winters, which in turn is quite supportive in order to strengthen the global prices.
In Indian prospective, the government has reduced the quantity in e-auction, which has drastically reduced coal availability in the merchant market. An Indian trader mentioned that currently South African 5500 NAR (RB-2) ‘ready to sale’ is offered at INR 5,200-5,400/MT at Krishnapatnam port. Meanwhile, the same grade is being offered in the range of INR 5,500-5,700/MT at Gangavaram & Vizag ports. South African RB-3 ready for delivery is offered at INR 4,800-4,900/MT as per loaded into wagon at Krishnapatnam port.
Demand in India likely to strengthen in Upcoming Months
Cancellation of coal blocks and higher prices in the domestic market by about 25% than imported have forced the manufacturers to go for imports. At present state of affairs, strong inquiries are coming from Indian manufacturers viewing December bookings.
A trader in India said, “East Coast based power producers and other manufacturers have started inquiries for December bookings. It is anticipated that demand intend to increase in coming months.”
Waiting Period across Different Ports
Krishnapatam: Within 2-3 days
Gangavaram: 6-7 days
Vizag: About 2-3 weeks (about 20 days)
Dhamra: 10-15 days
Coal buyers prefer to import at Gangavaram & Krishnapatnam ports on the background of minimum waiting time and large vessel handling capacity. Some traders are also considering Kakinada port.
Indonesian Coal
Currently, Indonesian 4200 GAR is being offered at USD 47-48/MT CFR India at West Coast for November deliveries. Meanwhile, 3600 GAR is offered at around USD 40-41/MT CFR India.
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