- Higher freights, monsoon-related domestic coal supply disruptions lift prices
- Firm offers face resistance from Indian buyers, port stocks edge higher
South African thermal coal prices at Indian ports rose sharply as of 27 August 2026, supported by tighter cargo availability, higher freight costs, monsoon-related domestic coal supply disruptions and stronger sponge iron prices. BigMint assessed RB2 (5,500 NAR) ex-Paradip at INR 12,500/t, up INR 700/t w-o-w, while ex-Vizag rose INR 800/t to INR 12,500/t. RB3 (4,800 NAR) ex-Paradip increased INR 750/t to INR 11,550/t, while ex-Vizag rose INR 800/t to INR 11,500/t.
The rally was further supported by firmer South African FOB values, with RB2 averaging around $94/t in August, up from $88/t in July. Along with freight around $21/t and limited cargo availability, higher FOB values lifted Indian replacement costs. Paradip RB2 reached its highest level since early March 2023, although prices remained below the INR 13,000/t recorded in March 2023. Despite the sharp rise, buyers resisted higher levels and kept purchases largely restricted to immediate requirements.
Cargo availability tightens as offers rise
Market participants reported firmer South African coal offers amid limited cargo availability and good enquiries from India. Freight was heard at around $21/t, adding to replacement costs. A vessel for Paradip was indicated at around $118/t, while portside offers reached INR 12,300/t and above.
At Vizag, offers were heard at INR 12,600/t, with 25,000 t of RB2 (5,500 NAR) reported sold at INR 12,550/t. Two cargoes were also reportedly sold to India at around $106/t FOB. A trader from Mangalore was heard to have concluded around 15,000 t of RB2 at INR 12,600/t ex-works.
Other transactions showed buyers still attempting to secure material below prevailing offers. Around 5,000 t of RB2 was purchased from Mangalore at INR 12,150/t on advance payment, while offers subsequently moved to INR 12,300-12,400/t. A separate RB3 purchase at INR 10,200/t from Mangalore two days earlier was followed by offers around INR 10,500/t.
Domestic shortages support import enquiries
Monsoon conditions continued to slow SECL dispatches and affect the consistency of preferred coal grades. Lower auction frequency across CIL subsidiaries also restricted availability. Recent SECL Coal Junction auctions showed strong bidding: Jhilmili G8 sized ROM rose from a base price of INR 2,318/t to a final bid of INR 4,128/t, while Amera G8 increased to INR 4,618/t. Higher auction realisations raised replacement costs for downstream users.
Domestic 5,000 GCV coal ex-Bilaspur rose INR 550/t w-o-w to INR 7,400/t on 27 August, while 4,500 GCV increased INR 150/t to INR 5,450/t.
However, thermal coal inventories at major Indian ports increased only 1.4% w-o-w to 13.67 mnt in Week 34 from 13.48 mnt in Week 33. Higher stocks at Mundra, Navlakhi, Tuna and Karaikal offset declines at Magdalla, Mangalore and Vizag. The marginal increase suggested replenishment rather than a broad recovery in import demand.
Higher sponge iron prices support sentiment
Sponge iron prices had also strengthened, with PDRI ex-Raipur rising INR 2,000/t w-o-w to INR 29,000/t, while PDRI DAP-Durgapur increased INR 1,400/t to INR 27,600/t as of 21 August. Higher coal and pellet costs increased production pressure and encouraged producers to maintain firm offers.
However, fresh enquiries remained subdued and transactions were largely need-based. Some producers had advance bookings, while buyers generally held sufficient inventories and resisted aggressive purchases. Market participants also reported that higher imported coal prices were difficult to sustain, encouraging some consumers to rely on domestic coal or existing stocks.
Overall, South African coal sentiment remained firm, but the sharp rise in portside prices widened the gap between seller expectations and buyer acceptance. Sponge iron prices and domestic coal supply constraints supported enquiries, while high FOB, freight and replacement costs continued to limit larger-volume buying.
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