Baltimore bridge collapse may affect coal imports from S. Africa
Offer levels decrease due to reduced enquiries
In the Asian thermal coal market, prices of RB2 (5500 GAR) coal remained stable w-o-w at INR 9,400/t ex- Gangavaram. However, prices for RB3 (4800 NAR) coal at Gangavaram were recorded at INR 7,900/, unchanged w-o-w. Furthermore, monthly prices of RB2 (5500 GAR) rose by INR 650/t compared to INR 8,750/t in February.
According to market participants, a deal of RB2 (5500 NAR) coal was heard concluded for 5,000 t at INR 9,500/t at Ennore port. Another deal was heard involving the sale of 4,000 t of RB3 coal at INR 8,100/t ex-Ennore port.
In India, Coal India Limited (CIL) typically increases production before summer to compensate for production loss during the monsoon. However, some imports may occur before the onset of the monsoons as certain end-user segments need to stock up before rain disrupts domestic mine operations.
Despite reduced availability of mid-April-loading cargoes, the Asian thermal coal market experienced sluggish demand. Offer levels decreased due to limited interest from India, the largest buyer. As the week progressed, sentiment softened further. Increased domestic production kept the market subdued, leading to fewer enquiries throughout the week.
The Baltimore bridge collapse incident may impede port supplies to Indian buyers, which could provide some relief to Australian and South African high-CV coal prices. Yet, limited industrial demand may curb price support in the short term. However, Indian imports from Baltimore port is minimal which may not put significant pressure on prices and imports.
Sponge iron prices
Sponge iron prices rose by INR 550/t w-o-w to INR 27,100/t exw Raipur on 29 March, fuelled by increased buying activity. This week witnessed improved buying, especially after the long holidays, leading to a significant surge in bookings and an uptick in spot offers.
South African prices
According to sources, portside prices of RB3 (4800 NAR) coal remained stable w-o-w and are currently assessed at $66/t FOB. Similarly, RB2 (5500 NAR) remained unchanged w-o-wand are currently assessed at $82/t FOB.
Outlook
South African thermal coal import prices are expected to remain stagnant amid reduced market enquiries, lower offer levels. However, short-term price support could be curbed by constrained industrial demand. Imports from South Africa may be hit in the near term due to meagre demand.