India: South African portside coal offers stay stable; market inactive during Dussehra

• Inventories dip slightly; GST reform prompts cautious buying
• Domestic coal prices rise on SECL premiums, bids for DRI coal strong 

South African portside coal offers in India stayed stable this week, with RB2 at INR 8,200/t and RB3 at INR 7,100/t across Vizag and Gangavaram. Market activity remained muted due to the festive season, though participants expect trade flow to revive from next week as activity gradually resumes.

India’s portside thermal coal inventories dipped marginally to 11.86 mnt in week 39 from 11.93 mnt in week 38, as per provisional BigMint data. Market stability was shaped by fluctuating ocean freights and the recent GST reform, with participants preferring a wait-and-watch stance before restocking aggressively.

Trade updates

Deals were limited but included 50,000 t of RB2 at INR 8,300/t ex-Vizag and 10,000 t of RB2 at INR 8,300/t ex-Krishnapatnam. Export offers held stable w-o-w, with RB2 at $69/t FOB and RB3 at $58/t FOB. Freight rates softened, with South Africa-India Panamax levels falling by $1.98/t w-o-w to $16.02/t.

Domestic coal market

Domestic coal offers moved higher this week, with 5,000 GCV assessed at INR 6,250/t ex-Bilaspur and 4,500 GCV at INR 5,300/t, up by INR 400-500 w-o-w. The hike followed strong premiums fetched in SECL’s recent auction, where sponge grade coal attracted robust bids. The upward revision was further reinforced by SECL’s new mandate requiring financial coverage for coal quality upgradation under the e-auction system, prompting sellers to lift offers. However, no major deals have been finalised yet, as buyers await clarity on the impact of these reforms.

Sponge iron market

The Indian sponge iron market began October on a subdued note. BigMint’s C-DRI index (ex-Rourkela) fell INR 400/t to INR 25,600/t. Prices weakened across most regions as festive closures restricted activity, with sellers resisting further cuts due to higher input costs.

Outlook

South African portside prices are expected to remain steady in the near term, with demand recovery likely once festive closures ease and post-monsoon industrial activity improves.