Market weak due to limited trading activities
Transnet derailment may push up prices
In the Asian thermal coal market, prices of RB2 (5500 GAR) coal remained stable w-o-w at INR 9,400/t ex- Gangavaram. However, prices for RB3 (4800 NAR) coal at Gangavaram port were recorded at INR 7,900/, unchanged w-o-w. Furthermore, monthly prices of RB2 (5500 GAR) rose by INR 650/t as compared to INR 8,750/t in February.
In India, Coal India Limited (CIL) typically ramps up production prior to the summer season to counterbalance production losses during the monsoon period. However, some imports may occur before the onset of monsoons, particularly as certain end-users seek to stock up before rainfall disrupts domestic mine operations.
Indian buyers too maintained their silence primarily due to robust domestic production of the fuel. State-run miner CIL continued its robust performance in terms of production in FY’24. CIL’s production rose by 10% y-o-y to 773.6 million tonnes (mnt) in FY’24 as against 703.2 mnt in FY’23. Total dispatches have risen by 753.5 mnt as compared to 694.7 mnt in FY’23.
South Africa’s Transnet Freight Rail (TFR) confirmed a train derailment involving four locomotives and six wagons, disrupting traffic destined for Richard’s Bay. The incident occurred on 2 April in the Richards Bay South region, impacting the coal export line. Market participants reported no current movements in the affected area. Operations have ceased on three rail lines, affecting railings into both the Richards Bay Coal Terminal (RBCT) and the Richards Bay multi-purpose terminal (MPT).
Deals this week-
- According to market participants, a deal of RB2 (5500 NAR) was heard concluded for 10,000 t at INR 9,500/t at Mangalore port.
- Another deal was heard involving the sale of 3,000 t of RB2 coal at INR 9,300/t ex-Vizag port.
- Additionally, 4,000 t of RB2 coal was sold at INR 9,400/t ex-Vizag.
- A transaction for 2,000 t of RB2 coal was completed at INR 9,550/t ex-Mangalore port.
Sponge iron prices
Sponge iron prices rose by INR 2,750/t w-o-w to INR 29,750/t exw Raipur on 5 April. This increase can be attributed to active spot trading, heightened buying interest, and the upward trend in steel prices. The rise in billet prices, particularly in Mandi Gobindgarh, by INR 1,550/t further contributing to this momentum, bolstered by robust trading activity.
South African prices
According to sources, portside prices of RB3 (4800 NAR) coal rose by 3% w-o-w and are currently assessed at $68/t FOB. Similarly, RB2 (5500 NAR) rose by 5% w-o-w and are currently assessed at $86/t FOB.
Outlook-
South African thermal coal import prices may not change significantly due to limited market enquiries. Additionally, robust domestic supply in India will put pressure on South African coal prices. However, the Transnet mishap may exert upward pressure on prices.