Depreciating INR and falling crude oil prices have pulled down South African coal offers to USD 46-48/MT, CFR India.
Speaking to importers and end-users, it was assessed that current offers have plunged by USD 1-2/MT; prevailing at USD 46-48/MT, CIF India for Jan’15 deliveries. Indian importers mentioned that coal demand is moderate amid stable sponge market.
Current index for RB1 is assessed at USD 50/MT, FoB Richards’s bay. In addition, market have been trending low as future prices are reflecting a downtrend.
[su_quote]An East Coast based trader mentioned, “Currently, we are offering South African RB2 at USD 46-48/MT, CFR Kandla port for Jan’15 deliveries. Prices may vary based on quantity and delivery period. However, quite few deals have been done at these price levels owing to devaluated INR and negotiation by buyers below market offers.”[/su_quote]
Stock & sales of RB2 material at Gangavaram Port is offered at INR 4,200-4,300/MT. While, the same grade material is offered in Kandla at INR 4,100-4,200/MT (all duties and clearance included). South African RB1 (6000 NAR) is available at INR 4,900/MT at the same port. Meanwhile, low GCV South African RB3 is offered at INR 3,600-3,650/MT, loaded on truck at Gangavaram port.
[su_quote]“Offers are expected to be firm in coming weeks. The situation is different now; there are many suppliers and limited buyers in the market. In addition, European coal demand has also fallen as constant decline in global crude oil prices is influencing manufacturers to focus on their energy alternatives and shift energy sources from coal to oil”, said an importer based in Ahmedabad.[/su_quote]
Vessel freight rate
The freight of shipping coal in Panamax vessel from South Africa to India is assessed at USD 7/MT. Freight has fallen in last one month and is currently in the range of USD 5-9/MT for all size of bulk vessels. In the current scenario, falling crude oil prices, which declined to USD 32.5/barrel, may further drive freight prices in near-term.
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