A sharp correction of $86/t in South African thermal coal import prices over the last week has led to Indian sellers reducing their RB2 (NAR 5500 kcal/kg) offers by INR 5,000-6,000/t to INR 19,000-20,000/t ex-Vizag.
However, even after the downward correction, there are no bids in the market from sponge iron manufacturers as they are waiting for further correction in prices, resulting in muted portside trades this week.
RB2 portside offers
Prices in INR/t, ex-cess and GST
“Sponge iron manufacturers have coal stocks for about 15 days currently and a downtrend is expected in imported thermal coal prices which is why no one is showing interest in portside trades,” a Visakhapatnam-based trader said.
Amid elevated imported coal prices and increased demand from the power sector, the price for GCV 5000 kcal/kg coal ex-Bilaspur is currently assessed at INR 12,500/t in the resellers’ market.
RB1 prices fall sharply
After rising to an all-time high of $442/t earlier this month, South African RB1 (NAR 6000 kcal/kg) grade coal prices are currently trading at $290/t FOB as on 16 Mar, down $86/t w-o-w amid a decline in gas and crude oil prices.
Ceasefire talks between Russia and Ukraine and rising exports contracts of Russian coal from China and India in respective national currencies also contributed to the decline in prices.
The discount for RB2 coal was heard at around $5/t this week, while that for RB3 (NAR 4800 kcal/kg) coal it was heard at $10/t.
A total of 0.85 million tonnes (mnt) of South African coal is scheduled to arrive at various Indian ports between 17-23 Mar, CoalMint vessel data reveals.
Out of the 0.85 mnt, Adani Enterprises is set to bring 0.25 mnt of thermal coal at Dhamra, Gangavaram and Krishnapatnam ports, while the rest 0.6 mnt is set to arrive for various end-users such as Tata Steel, Adand Carbo, Visa Steel, etc.
Outlook
CoalMint believes that portside RB2 prices are likely to see a further correction amid expectations of a downtrend in imported coal prices in the coming week.
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