Constant rise in South African coal index may drive India towards other alternatives, if offers exceed beyond the current level.
India, a biggest destination for South African coal, is busy to secure stock for monsoon; resulted to rise in demand now for May and June loading.
South African coal prompt cargo CFR India offers have risen marginally by USD 1-2/MT owing to rise in index and current freight rates. Currently 5500 NAR Panamax shipment is offered by a trader at USD 52-52.5/MT, CFR Gangavaram Port for May’16 loading. While, 6000 NAR offers have reached at USD 62/MT, CFR Indian ports.
Meanwhile, constant rise in South African prices may drive Indian buyers towards other cheaper alternatives. On the other side, washed domestic coal is ready to compete with imported, if offers may go beyond the current level. Also, uptrend in South African coal may hamper Indian demand in near term.
However, Indian demand is active now for 5500 NAR and 4800 NAR but limited cargo availability restricted buyers to book material hastily. 4800 NAR Panamax shipment is being offered at USD 42-43/MT, CFR India. Whilst, Supramax is heard at USD 45-46/MT, CFR for May’16 loading.
A West Coast based trader mentioned, “There are many inquiries from India in the market for prompt cargoes but no one is ready to take position quickly as market is quite up now and high freight rates reducing feasibility for import.”
Vessel freight rates
Freight for shipping coal in Panamax and Supramax vessels from South Africa to India is assessed at USD 7-8/MT and USD 9-10/MT for East and West Coast ports respectively. Meanwhile, freight for all size of bulk vessels is supportive now as driven by increased crude oil market.
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