India: Imported South African coal portside prices stable w-o-w

• Over 35,000 t of deals recorded this week
• Sponge iron prices recover after steep drop

Prices of RB2 (5500 GAR) coal in the Asian thermal coal market remained stable w-o-w at INR 10,100/tonne (t) ex-Gangavaram. Prices of RB3 (4800 NAR) coal at Gangavaram Port were recorded at INR 8,300/t, unchanged w-o-w. Trades of around 35,000t were recorded by BigMint.

• A deal for about 30,000 t of RB2 was heard in the eastern part of the country at $116/t CIF.
• Deals were heard for about 4,000 t of RB3 at INR 8,050-8,150/t at Vizag Port.
• A deal for about 1,500 t of RB1 was concluded at INR 10,500/t ex Kandla.

Factors impacting prices

South African prices stable w-o-w: Portside prices of RB3 (4800 NAR) coal have remained stable w-o-w and are currently assessed at $78/t FOB. Also, RB2 (5500 NAR) coal prices are unchanged w-o-w at $95/t FOB.

Rail maintenance schedule: South Africa’s Transnet Freight Rail (TFR) has rescheduled its annual maintenance on the coal line from 23 July-1 August instead of the previously planned 9-18 July. This adjustment is intended to allow more time for coal inventories to build up at the Richards Bay Coal Terminal (RBCT), where stocks recently fell to 2.4 million tonnes (mnt), 100,000 t below the year-to-date average. Supplies to the port have been impacted by frequent train derailments, cable thefts, network failures, and broken tracks along the North Corridor line. The two-week delay in maintenance will enable TFR to increase rail deliveries to RBCT, thereby boosting port stocks to meet export demand during the maintenance period.

Sponge iron prices recover after steep fall-Sponge iron (P-DRI) prices fell by INR 350/t w-o-w to INR 25,450/t exw Raipur on 28 June. Sponge prices are being driven down by the downtrend in the semi-finished steel sector. However, a recovery of INR 450/t has been seen over the past couple of days.

Outlook

South African coal prices are expected to remain rangebound on weaker buying interest. In the domestic market, Indian buying has remained subdued on high port stocks and onset of monsoons. During week 25 of calendar year 2024 (CY’24), thermal coal stocks at Indian ports stood at 16.26 mnt compared to 16.05 mnt in week 24, an increase of 1.33%.