South African Coal Offers Rally on Strong Demand

South African coal prices have remained volatile in the wake of low availability for Jan’17 shipments plus increased demand in European countries.

South African coal demand in European nations increases considerably due to extreme weather conditions where consumption of coal is high.

South African coal prices remain volatile since the beginning of Jan’17. While, coal index price rise sharply by USD 3-4/MT to USD 86.7/MT in week 01, it started falling and reached at the level of USD 82.45/MT in week 02. At present, RB1 (6000 NAR API4) index assessed at USD 86.6/MT, FoB Richards Bay which has increased again by USD 2-3/MT, compared to last week.

South African 6000 NAR coal is offered at USD 83/MT, FoB Jan’17 loadings. While 5500 NAR and 4800 NAR coal are offered at USD 71-72/MT and USD 57/MT FoB respectively.

Source: SteelMint Research

Indian Market Scenario:
An East Coast based trader has commented that”Indian demand for South African coal is falling due to the closure of many sponge iron plants in the country and buyers opting for cheaper domestic coal.”

Currently, RB1 (6000 NAR) coal prices are assessed at USD 93-94/MT, CFR East Coast. While low grade 5500 NAR coal is being offered at USD 81-82/MT CFR, East Coast and RB3 (4800 NAR) coal price is offered at USD 65-67/MT CFR, East Coast.

In West Coast, Prices for RB2 (5500 NAR) are assessed at USD 79-80/MT, CFR Mangalore. While low GCV 4800 NAR coal is offered at USD 65/MT, CFR Mangalore.

Stock and Sale Quantity:
In East coast, very little quantity of Stock and sale material is available for sales owing to lower demand. Few traders are offering RB2 (5500 NAR) coal at INR 6,400/MT at Dhamra port. However, Low CV grade (4800 NAR) coal is not available at Dhamra Port.

While offers for 5500 NAR are heard at INR 6,300-6,400/MT at Paradip, Gangavaram and Mangalore Ports (all duties and clearances included).Low CV grade 4800 NAR coal is offered at INR 5,500/MT in Mangalore port.