Low inventories at RBCT kept prices supported
Increase in enquiries from sponge producers
In the Asian thermal coal market, prices of RB2 (5500 GAR) rose by INR 450/t w-o-w to INR 8,950/t ex- Gangavaram. However, Prices for RB3 (4800 NAR) coal at Gangavaram Port were recorded at INR 7,750/, up by INR 350/t w-o-w. Furthermore, monthly prices for RB2 rose by INR 350/t as compared to INR 8,950/t in February 2024.
Prices rose amid Indian stock-and-sale traders sought to offset their short positions, driving up demand. Additionally, market observers noted that rising freight rates could exert further upward pressure on prices.
RBCT faces cargo loading concerns as stocks plummet
Richards Bay Coal Terminal (RBCT) stocks at 2.31 mnt raised concerns of cargo loading slowdown. Inventories have declined by 25% from 3.09 mnt a month earlier. Limited rail capacity led RBCT shareholders to depend heavily on coal reserves. Transnet cited adverse weather, power outages, and cable theft impacting railings to RBCT.
Deals for the week-
- A deal was heard involving the sale of 3,000 t of RB2 coal at INR 9,150/t ex-Vizag port.
- Additionally, 3,000 t of coal were sold at INR 9,000/t ex- Ennore port.
- Another deal was concluded from Mangalore port for 7,000 t of RB2 (5500 NAR) at INR 9,150/t.
- A deal was heard from Gangavaram port for 3,000 t of RB3 (4800 NAR) at INR 7,400/t early this week.
- Another deal was heard involving the sale of 5,000 t of RB2 coal at INR 8,800/t ex-ennore port early this week.
- A transaction for Panamax vessel of RB2 (high sulphur) coal was completed at $95/t FOB Richards Bay.
Sponge iron prices
Sponge iron prices dropped by INR 50/t w-o-w to INR 26,250/t exw Raipur on 1 March 2024. This decline can be attributed to a negative market sentiment influenced by a significant downturn in the semi-finished steel segment. Nonetheless, active spot trading at reduced price levels provided support to the market.
South African prices
According to sources, portside prices of RB3 (4800 NAR) coal rose by 5% w-o-w and are currently assessed at $66/t FOB. Similarly, RB2 (5500 NAR) rose by 6% w-o-w and are currently assessed at $82/t FOB.
Outlook
The South African thermal coal import prices are expected to rise amid declining inventory in Richards Bay Coal Terminal. Additionally, there has been a uptick in demand noted this week, which may help keep prices supported. However, ample coal stocks available at Indian ports might exert pressure on prices.