On Saturday, China’s NDRC (National Development and Reform Commission) met 10 major power companies on the weekend and granted approval for them to import coal without clearance restrictions, except for Australia.
The country has decided to prioritise imports from Mongolia, Indonesia and Russia, and power producers have been assured that they don’t have to pay more than RMB 640/t ($98/t) for domestic coal.
South African thermal coal (API4) index is scaling up today on the news of China formally blocking Australian coal imports. The index for Jan ’21 is currently trending at $100/t (it was $82/t a week ago on Monday).
Amid this, the portside prices for RB2 (5500 kcal/kg NAR) has moved up by INR 400/t and is currently assessed at INR 5,800/t at ex-Gangavaram port. CoalMint learned from market sources that few traders have also started offering RB2 coal at INR 6,000/t.
“The price of INR 5,800/t for RB2 is still lower against the landed cost of RB2 coal at Gangavaram port as sufficient stock at port is available and demand is also not very strong especially from sponge sector”, remarked a coal trader based in Raipur. He further added that if index continues to go up, eventually portside prices would also be pulled upwards.
Coal stock at Indian ports
The stock data maintained with CoalMint reveals that thermal coal stock at Indian port has moved up by 1.3% w-o-w basis and stood at 17.6 mn t as on 10 Dec ’20. At Gangavaram port the coal stock on the same day was recorded at 2.99 mn t (down by 2% w-o-w basis).
South African coal coming in December
In terms of quantity coming in December, about 3.05 mn t of thermal coal is expected to arrive at Indian ports between 1-18 Dec’20, according to vessel-line up data maintained with CoalMint.
Of the many buyers, Swiss Singapore has the highest quantity of shipments coming in so far at 0.54 mn t, followed by Adani Enterprise at 0.48 mn t and IMR Resources at 0.38 mn t. Gangavaram port is set to receive the maximum quantity of coal coming in at 1.46 mn t, followed by Krishnapatnam port at 0.33 mn t.
With the holiday season starting in various countries, market participants believe that both imported and domestic portside prices would find a clearer direction by mid-January.
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