The South African coal market has remained volatile during the week. Index Price which had moved upward has now seen some downward correction this week.
South African coal index API4 was assessed at USD 76.6 for July loadings, while index for Aug’17 was assessed at USD 76.80 yesterday.
There has been tightness in availability of 4800 NAR, also discounts on coal prices has not changed which is supporting South African coal prices, commented an Indian Trader.
Supply of South African 4800 NAR coal has been affected by low production of 5500 NAR coal. In order to make up for demand of 5500 NAR coal, miners used to blend 6000 NAR and 4800 NAR coal to prepare 5500 NAR coal. As a result, much of the 4800 NAR material is used up for blending purpose, thus creating supply tightness in the market.
Moreover, Discounts on coal prices have remained almost same compared with previous week. 4800 NAR coal was available at a discount of USD 12-13/MT to 6000 NAR coal, while 5500 NAR coal was available at a discount of USD 7.5-8/MT.
However, Buyers’ expectations on discounts are higher than the market offers. Buyers are demanding a discount of USD 16/MT for 4800 NAR coal, and a discount of USD 9/MT for 5500 NAR.
At present, spot prices coal were assessed at USD 68/MT, FoB Richards Bay for 5500 NAR. While 4800 NAR was offered at USD 53-54/MT, Fob Richards Bay.
Indian buying interest shifted towards South African market, because of the rising Indonesian coal prices. Exports of South African coal to India increased 155% W-o-W to 1.43 MnT this week (11-17 Jun’17) compared with 0.56 MnT in the previous week.
5500 NAR coal is available at USD 77-78/MT, CFR India. While 4800 NAR coal is offered at USD 62-62/MT, CFR India.
Leave a Reply