In the Asian thermal coal market, prices remained stable w-o-w . Prices for RB3 (4800 NAR) coal at Gangavaram Port were recorded at INR 7,400/,unchanged w-o-w Furthermore, monthly prices dropped by INR 800/t as compared to INR 8200/t in January 2024.
Although there has been a slight uptick in Indian buyers’ interest in South African-origin coal lately, driven by attractive prices and increased inquiries from industries like cement and steel, the overall demand for India’s thermal coal at the spot market has remained sluggish. This is primarily due to the presence of a sufficient level of domestic stocks.
Despite the slow demand, transactions are still occurring. However, buyers who typically relied on seaborne supplies are now showing a preference for domestic coal. According to an India-based trader, this shift in preference towards domestic supplies is notable, indicating that while there is an improvement in demand, buyers are increasingly favoring domestic coal over imported options.
Deals for the week-
- According to market participants, a deal of RB2 (5500 NAR) was heard to be concluded for 3000t at INR 8700/t at Mangalore port.
- Another deal was heard involving the sale of 2000 t of RB3 coal at INR 7500/t ex-Vizag port.
- Additionally, 1000 t of coal were sold at INR 8800/t ex -Ennore port yesterday.
- A transaction for 7000 t of RB2 coal was completed at INR 8800/t ex- Paradip port.
- Moreover, 5000 t of RB2 coal were sold at INR 8800/t ex- Mangalore.
- Another 1000 t of RB2 coal were sold at INR 8800/t ex- Mangalore.
- An RB1 vessel was sold at $104/t CFR India for a Panamax vessel at Kandla port.
- Furthermore, a Capesize vessel carrying RB2 coal was sold at INR 8800/t ex-Mangalore.
South African coal exports
South African coal exports to India were recorded at 1.92 mnt in January 2024, down 39% m-o-m as against 3.17 mnt in December 2023. Buying activity for South African coal remained limited in January, driven by expectations of further price drops amid subdued demand. Market participants noted a cautious atmosphere, indicating buyer hesitancy as they await potentially more favorable pricing conditions.
Sponge iron prices
Sponge iron prices remained largely unchanged w-o-w to INR 26,300/t exw Raipur on 16 February. Trading activity witnessed an uptick driven by improved demand observed across various regions. Buyers were notably active in securing material amidst increasing offers in the market. As a result, trading volumes surged during this week compared to the preceding week.
South African prices
According to sources, portside prices of RB3 (4800 NAR) coal remained unchanged w-o-w and are currently assessed at $63/t FOB. Similarly, RB2 (5500 NAR) remained stable w-o-w and are currently assessed at $77/t FOB.
Outlook
The South African thermal coal import prices are expected to either remain range-bound or decline as market participants adopt a cautious approach, with ample coal stock available at Indian ports. Despite this, there has been a slight improvement in demand observed this week, which may help keep prices within a stable range.