South African Thermal coal prices have again started to plunge, declined by about 6-7% for Jan’15 deliveries.
Post experiencing a rapid hike in Nov’15 now South African coal prices seems on downwards. The sudden price hike in Nov ’15 was a temporary which was driven by lack of cargo availability at Richards bay. South African 5500 NAR offers fallen to 49-51/MT CIF India for current bookings.
Prices for South African cargoes (RB1) from Richards Bay were reached at USD 54/MT in Nov’15 mid. But, again prices slipped to USD 51/MT owing to low demand. Moreover, South African coal is also competing with premium Australian grades, which made it less attractive now.
Indian utilities, a major buyer of South African grade, is taking advantage of global industrial slowdown and market volatility. Indian traders are offering RB2 at USD 51/MT, CIF Dhamra Port for Jan’15 deliveries.
Due to cargo shortage of 4800 NAR, the material is offered at the same level of USD 39-40/MT, CIF India for Dec’15 loadings.
[su_quote]“India’s import from South Africa is more or less constant in Nov’15. But, sudden price hike in last month may hamper import as Indian buyers are now looking to buy coal from Australia due to cost effectiveness”, commented an Indian trader.[/su_quote]
On the other side, Indian consumers are less interested for imported coal as domestic production has increased by CIL. Rise in domestic availability is likely to reduce coal imports further.
An east coast based trader is offering a capsize vessel (0.12 MnT) of South African 5500 NAR coal at USD 51/MT and it is expected to reach at Vizag Port till 14 Dec’15. Meanwhile, the same grade material is currently offered at USD 49-50/MT, CIF Paradip Port.
At present, very less quantity of RB2 is available for stock and sell, which is being offered at INR 4,200-4,300/MT (all duties and clearance included, VAT & CST will be added further) at Gangavaram and Paradip Port.
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