South African 5500 NAR coal, majorly used by sponge manufacturers in India, has been following a downtrend since the beginning of the year in concurrence with slowing coal demand in the global market.
South African RB2 offers have shown a steady decline since past couple of months. Offers has fallen to USD 3-5/MT in Aug’15 and also registered a significant fall of about USD 9-10/MT in a single quarter. Current offers have reached at USD 56-57/MT CFR East Coast India for August end delivery, the offer was at USD 60-61/MT in July’15.
Constantly falling steel prices, along with depressed global demands is stalling the recovery of South African Thermal coal prices. Prices are still weak, having reached the bottom in this year and expected to decline further at the range of USD 54-55/MT till the end of Aug’15.
Although few majors in Indian coal traders such as Raw Met, MBG Commodities, Gandhar Coal, Green Energy, Agarwal Coal, IMR etc. have a huge quantity of RB2 at Indian East Coast ports and are currently offering the material at INR 4200-4400/MT stock & sale (All duties and port clearances included). Traders’ stock & sale offers have turned down sharply in last few weeks, about INR 200-300/MT, at different ports suffering from unfavorable monsoon, coupled with sufficient stock level.
Adani Enterprises, one of the prime traders in India highlighted that, “East Coast based port Gangavaram, having about 25,000-30,000 MT of South African RB2 (5500 NAR) ready to sell material, is currently offering in the range of INR 4,600-4,700 /MT. Also, RB3 (4800 NAR) coal stock & sell material is being offered at the price of INR 4,200/MT at Dhamra Port.”
Indonesian coal offers have been also influenced by the market downtrend, which declined to INR 2,200-3,200/MT (stock & sale) for 3400 GAR at West Coast ports. Meanwhile, Indonesian 5000 GAR is being offered at INR 4,200/MT East Coast ports.
South African Coal Export Declined in June’15
Presently, South African mining sector is struggling with depressed prices, falling production, rising costs etc., in turn leading to fall in country’s export. Monthly thermal coal export declined 7% to 4.6 MnT in June’15. On the other hand, India is still a big market for South African coal, remaining the largest buyer in June’15. Also, India’s total coal import from South Africa has increased about 30% to 3.7 MnT in July’15.
About 50% of South Africa’s thermal coal shipments have been delivered to India. In H1 2015 the country’s thermal coal export reached 35.68 MnT all over the world, of which about 17.86 MnT has been shipped to India.
Vessel Freight Rate
The freight of shipping coal in Panamax vessel from South Africa to India is assessed at USD 11-13/MT. Freight has risen marginally in last one month and is currently in the range of USD 8-13/MT for all size of bulk vessels. In the current scenario, falling crude oil prices which declined to USD 47-48/barrel on Wednesday may influence freight prices in near term, which are expected to decline at the end of Aug’15.
Leave a Reply