- Weak sponge iron market weighs on trade
- Portside inventories decline by 3% w-o-w
South African RB2 thermal coal prices at Indian ports remained steady w-o-w this week, assessed by BigMint at INR 8,100/tonne (t) exw-Gangavaram, while RB3 slipped by a minor INR 50/t to INR 7,000/t. With August shipments largely booked, September delivery offers set the tone of the market, though trades remained limited.
Some deals were heard — around 5,000 t of RB3 were sold from Mangalore at over INR 7,200/t and 8,000 t of RB3 were sold at INR 7,000/t exw-Paradip. Meanwhile, RB2 availability was absent at Haldia, and limited traders reportedly offered RB3 at INR 7,400/t.
Portside inventories declined 3.4% w-o-w to 14.27 million tonnes (mnt) in Week 31, amid a slight demand pick-up. However, buying interest remained cautious as the sponge iron market was weak.
On the export front, RB2 and RB3 offers increased by $0.5-1.5/t w-o-w, to $73/t and $60/t FOB South Africa, respectively.
Domestic coal prices remained supported. BigMint assessed 5000 GCV at INR 5,000/t (unchanged) and 4500 GCV at INR 4,500/t, up INR 100/t w-o-w, amid constrained supplies from SECL due to the monsoon.
In the sponge iron market, sentiment was mixed. While BigMint’s C-DRI index (ex-Rourkela) rose by INR 300/t w-o-w to INR 26,100/t, spot prices on 7 August fell INR 100-200/t in key regions such as Raipur, Durgapur, and Bellary. Only Chennai saw a marginal rise, driven by market uncertainty.
Most sponge iron buyers remained on the sidelines, limiting bulk purchases due to poor steel demand and price correction expectations. Sellers were forced to offer discounts, and only need-based deals were concluded at low offers.
Outlook
Portside South African coal offers may remain steady in the near term, supported by tight availability and a shift towards September cargo. However, actual trade volumes will depend on sponge iron demand revival post-monsoon and whether buyers overcome caution amid ongoing steel market weakness.
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