Surged offers for South African thermal coal is restricting Indian bookings as offers are still hovering in the range of USD 51-52/MT, CFR India.
Buying appetite for South African coal in India seems to weaken now as many buyers have already stocked up for monsoon. Also, South African coal is still hovering at higher level for May’16 and Jun’16 loading.
South African 5500 NAR coal, mostly preferred by Indian sponge utilities, is witnessed at upper side. Current offers are assessed at USD 51-52/MT, CFR East Coast India for current loading. While, low GCV South African 4800 NAR is being offered at USD 42/MT, CFR India.
It is reported by an East Coast based trader that offers for 5500 NAR at Haldia is heard at USD 55/MT for May’16 end loading. Whilst, Gangavarm port offers are assessed at USD 51/MT. However, Jun’16 shipments for 6000 NAR are reported at USD 52-53/MT, FoB Richards Bay.
It has come on light that Indian buyers are currently limiting for aggressive bookings from South Africa owing to high offers coupled with available alternatives in the market at cheaper rates.
[su_quote]An East Coast based trader highlighted, “There is no significant alteration in demand for South African grade, but restocking before monsoon (runes from May-Sep in India) has added some more shipments into India. We are offering 5500 NAR Panamax shipment at USD 51.5/MT, CFR Paradip for May’16 end loading.”[/su_quote]
He also added that offers are firm amid high sea freight and rise in some additional demand in India. This is also supporting market to keep on upper side. But, high rates are deterring fresh deals into India.
Another East Coast based trader also reported that ready to sell material of 5500 NAR coal is available at INR 4,600/MT at Paradip Port loaded on truck. Whilst, the same grade material is being offered at INR 4,400/MT (all duties and clearance included, taxes will be added further) at Krishnapatnam Port.
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 is supportive now; driven by increased crude oil market and hovering in the range of USD 6-10/MT.
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