Portside prices of South African (SA) RB2 (5500 NAR) grade fell by INR 700/t this week amid declining imported coal prices, and sluggish buying interest from sponge iron manufacturers.
However, limited coal stock at major ports prevented a sharp fall.
RB2 portside trade prices for the current week
| Port | Nov’21 W2 | As on 18 Nov’21 |
| Ex-Gangavaram | 11,000 | 10,300 |
| Ex-Mangalore | 11,800 | 10,500 |
| Ex-Vizag | 11,000 | 10,300 |
Prices in INR/t, ex-cess and GST
Owing to lower RB2 stock, no major deals were reported from Haldia and Paradip ports.
Bulk enquiries from sponge iron manufacturers continued to remain lacklustre this week too as they awaited further correction in portside prices.
Sluggish steel demand sentiments have forced sponge iron manufacturers to book only small quantities of thermal coal to enable them to just keep their operations running.
Sponge iron prices have fallen by INR 2,000-4,000/t since the beginning of the month and are currently assessed in the range of INR 29,000-31,000/t for PDRI and CDRI ex-Raipur.
“There is a sense of caution in the market as coal procurement is happening as per needs, Amid the volatility and uncertainty in case of portside prices, due to limited stock at ports, we have shifted to coal procurement directly via imports,” a sponge iron manufacturer said.
On the other hand, traders are also holding their stock and not offering much in the market, amid limited vessel arrival from South Africa. As per CoalMint’s vessel line-up data, a total of 0.44 mn t of vessels are scheduled to arrive from South Africa between 18-26 Nov’21.
Portside deals concluded
In various confirmed deals collected by CoalMint between 15-18 Nov’21, a total quantity of 25,000 t of RB2 coal have been traded at an average price of INR 10,250/t, ex-Gangavaram this week.
Imported South African prices decline further
In tandem with global sentiments, South African RB1 (6000 NAR) grade coal prices for November fell further this week by $8/t w-o-w to $131/t as on 17 Nov’21.
The discounts for RB2 and RB3 are currently assessed at $15/t and $25/t respectively for November loading . Capesize vessel freight from RBCT to Gangavaram is at $19/t.
Short-term outlook
With imported coal prices expected to remain under pressure amid the improving supply scenario in China and tepid domestic demand in India, portside prices for South African coal are also expected to remain in a tight range in the upcoming week.
In fact, market participants are expecting South African thermal coal prices to fall further and stablise at $115-120/t levels for RB1 (6000 NAR) that would trigger portside prices to fall below INR 10,000/t soon.
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