South African Coal Prices Fall Further over Weak Sentiments

South African coal prices continue to fall; spot offers slipped by USD 2-3/MT on the week.

Weak buying from India has put downward pressure on coal prices. Many Indian buyers have already booked their coal shipments prior to the monsoon, as during the rainy season operation in many ports will be halted.

Coal stock levels at the Richards Bay Coal Terminal (RBCT) was close to 5.3 MnT in mid-April, during this period Indian buyers were active in the South African coal market. However, after the conclusion of the majority of shipments for May loadings, stock at RBCT has fallen by 0.34 MnT W-o-W to 4.88 MnT as on 10 May’17.

Shortage of Low-CV Material:
Availability of 4800 NAR coal remains limited in the market, as bad weather in Africa caused a delay in shipments. Discounts for 4800 NAR coal was USD 13-14/MT to 6000 NAR coal against bid offers of USD 16/MT.

Since the discount has remained constant over the week, the coal price of 4800 NAR fell on account of declining index price of South African coal API4, which was assessed at USD 73 this week.

Coal Price for RB1 6000 NAR was assessed at USD 69-70/MT, FoB Richards Bay this week. Market Price for 5500 NAR was USD 60-61/MT, FoB Richards Bay while that for 4800 NAR stood at USD 48/MT, FoB Richards Bay.

India Market Scenario:
Enquiries from Indian buyers increased this week, as they look to stock coal before the monsoon, although this could not translate into deals as bids were below seller’s expectation.

Low Indian demand for imported coal and falling FoB prices weighed on the Indian CFR coal prices, with 5500 NAR prices falling by  USD 2-3/MT to USD 71-72/MT CFR East Coast India, while low-CV 4800 NAR coal price stood at USD 57-58/MT, CFR India East Coast.