Over 12 million tonnes of thermal
coal are stockpiled at India's ports, around 7-8 million of which is unsold,
according to some of India's biggest importers.
The tonnage of unsold coal
already in India makes it unlikely that Indian buyers will be returning to the
spot market for substantial fresh purchases anytime soon and helps explain why
Indian buyers have been largely dormant for months.
“I have never seen port
stockpiles so high, they are over 12 million tonnes and more than half is
unsold,” a source at one of the largest importing firms said.
Other importers pegged the
stockpiles at 10-12 million tonnes and added that they are struggling to sell
this coal in the teeth of slow industrial and power generation demand.
“It's got nothing to do with
coal prices being too high, although they are too high and ought to come down,
it's just that the demand is not there, it has certainly fallen in the past few
months,” said a coal importer.
Prompt South African spot coal
prices have fallen to $111.00 a tonne FOB Richards Bay from over $120 in Q3 but
this and weak freight rates are still not enough to tempt Indian buyers back
into the market for more than the occasional, opportunistic buy, traders said.
India accounts for roughly 30
percent of South Africa's coal exports and is taking increasingly large chunks
of low to medium-grade Indonesian coal.
Any falloff in Indian coal demand
can have a significant impact on international coal benchmark prices.
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