South African coal prices increased on account of supply shortage with Index price API4 rising to USD 75.15 this week.
Low Availability of 4800 NAR coal could be attributed to the rise in prices. During Apr’17, there was a shortage of 4800 NAR material due to rain. However, the demand for the material was high, as Indonesian coal offers were high during Apr’17.
In order to meet their demand, buyers’ were forward booking coal shipments from South Africa in Apr’17, which only covered up coal requirement for Apr-May’17 shipments.
Now for Jun’17 shipments, coal availability is weak on the supply side and suppliers have limited cargoes to offer which are pushing coal prices up.
At present, South African Index API4 was recorded at USD 75.15. 5500 NAR coal is being offered at a discount of USD 7.5-8/MT to 6000 NAR and discount for 4800 NAR coal was USD 13/MT.
Market Price for 5500 NAR was assessed USD 62-63/MT, FoB Richards Bay while that for 4800 NAR stood at USD 50/MT, FoB Richards Bay.
Indian Market Scenario:
The tightness of cargoes has limited impact on buyers as June and July are traditionally slow periods in India. Most of the buyers have already stocked coal for monsoon period.
Price offers for 5500 NAR coal was heard at USD 72-73/MT, CFR Krishnapatnam. However, buyers were willing to pay USD 71/MT for the same.
4800 was available at USD 61/MT, CFR Krishnapatnam against buyers expectation of USD 59/MT of the material.
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