South African thermal coal index hit the highest level of the year today at USD 61.9/MT, FoB for Jul’16 loadings, reflecting bullish trend in the market further.
With the glimpse of positive hope among the coal miners, South African thermal coal forward curves are starting to point towards higher prices in the 2nd half of the year. While, the current index reflected today at USD 61.9/MT, FoB (6000 NAR) for Jul’16 loadings. Moreover, market is trending high as material for Aug’16 loadings is assessed at USD 63.65/MT, FoB.
A market source (one of the trading and shipping company in India) highlighted, “South African coal has been strengthen since last couple of months. The shape of the future price curve has gradually been shifting from ‘backwardation to contango’, which shows bullish trend in the market further. Whereas, the forward price exceeds that for near-month.”
An East Coast based Indian trader mentioned that global thermal coal offers are moving up on the wake of constantly rising Pet coke market as well. Indian cement industry is performing well recently over high domestic demand, which resulted in sudden upswing in Pet coke demand and prices gradually in the market.
Currently, US origin Pet coke (6-7% sulfur) is available at USD 72-73/MT, CNF India for Aug’16 loadings. While, with high sulfur contain Saudi Pet coke (9%) is available at USD 69-70/MT, CNF India for the same period.
South African coal CNF India offers
Commonly, Indian utilities are used to slow in trade activities during monsoon season, although decided to step out to follow the market that is on peak.
• South African 5500 NAR (RB2) in a capsize vessel is being offered at USD 59/MT, CFR Paradip and Gangavaram ports for Aug’16 loadings. As the market goes too high, buyers are expecting more discount on the given level.
• Low CV material 4800 NAR is available at USD 48/MT, CFR India on Capsize vessel for Aug’16 loading.
• South African 6000 NAR coal is offered by traders at USD 59/MT, CNF India in large size vessel for the same period.
At present, Indian utilities are partially buying Pet coke and South African coal. But, they have delayed buying as expecting to go down market shortly.
There are market speculations that South African coal prices will continue to go up till the end of Jul’16, Also, sea freight market expected to follow the trend.
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