South African coal index hit the 40 month highest on 18 Oct’16 and is likely to cross the level of at USD 100/MT, FoB for (6000 NAR) by the next week for Nov’16 shipment.
The beginning of week 42 seems to be a golden week for South African coal market because index have hit the highest since Jul’13 yesterday and reached at USD 90.8/MT, FoB for Nov’16 loadings. The fast upward moving coal prices left traders and buyers in wait and watch mode. Moreover, the market is completely unpredictable for the near term.
However, the market has recovered from its 2-3 years fall in last 3-4 months. On the other side, day on day changes in the prices kept market quit.
Commented by an Indian trader, “At present, sudden rise in coal index has halted the trading activity in India. In addition, global market is also quiet as no new offers have heard on the current level. However, the last week South African 5500 NAR coal deals were concluded at USD 75/MT, CFR at Indian ports.”
One of the Indian importer highlighted, the reason behind sudden rise in South African coal prices is rapid increase in Korean demand, strong paper trading along with Chinese buying speed over the weeks. While, While, supply shortage in South Africa, Indonesia, Australia and Chinese domestic market is also driving coal offers up globally.
South African coal offers of last week assessed at 5500 NAR (RB2) at USD 74-75/MT, 4800 NAR at USD 64/MT, CFR East Coast of India. Meanwhile, on the basis of current index, RB2 offers may reach at USD 84-85/MT, CFR India.
In India, buyers preferred to book small vessels in groups as per their requirements. While to opt stocked material at ports seems more feasible for them. On the other side stock & sale prices at ports have also turned up sharply on the wake of recent price hike globally.
Stock and sell material offers for RB2 by an Indian trader at INR 6,100-6,200/MT at Paradip Port. Whereas, at Vizag and Gangavaram ports, same grade material is available at INR 6,000/MT loaded on truck basis (all duties and clearance included, VAT & CST will be added further). Very less quantity of 4800 NAR is been offered at INR 5,000-5,100/MT at East Coast Port.
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