South African thermal coal is still being offered at higher prices due to improved freight rates and monsoon demand. But, Indian buying are still on doubt for quick bookings over increased CFR offers.
South African coal offers have been volatile since the beginning of 2016, also experiencing a higher index from last couple of weeks. Rising sea freight rates and firm FoB offers are hampering Indian buying, although this is a peak time for Indian coal restocking before monsoon. While, there is still more demand of South African coal in India instead of Australian and Colombian thermal grades.
On the other side, falling sponge market in India is not esteeming surge in South African coal offers as sponge market is weakening day-by-day, which has down by about INR 500-1,000/MT in last one week.
Current bookings in early-May and mid-June loading for RB2 (5500 NAR) coal are heard to be evaluated at USD 51-52/MT, CFR Paradip port on Panamax vessel. Meanwhile, buyer’s inquiries are seen for low CGV material also; 4800 NAR is available at USD 42-43/MT, CFR Gangavaram Port.
An East Coast based trader mentioned that offers for 5500 NAR are somehow higher at Dhamra and Haldia Ports at USD 53/MT and USD 54/MT, CIF respectively. Whilst, Gangavaram high seas sale is heard at USD 54/MT.
Another East Coast based trader also reported that 70,000 MT ready to sell material of 5500 NAR coal is available at INR 4,600/MT at Vizag Port. Whilst, 4800 NAR material is offered at INR 3,800/MT and INR 4,000/MT (all duties and clearance included, taxes will be added further) at Gangavaram and Paradip Ports respectively.
In context to Indian market, conventional buyers are preferring high GCV coal now to maximize cost efficiency as duty reforms (cess at INR 400/MT) in Indian budget makes imported coal more costly since Apr’16.
Vessel freight rates
Sea freight rates have gone up now a days, also freight for shipping coal in Panamax vessel from South Africa to India is assessed at USD 8-9/MT for East Coast ports. Meanwhile, freight for all size of bulk vessels has surged now as driven by increased crude oil market and hovering at the range of USD 6-10/MT.
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