Amid elevated prices, sluggish demand from sponge iron sector and rising efforts to explore alternate blends, thermal coal vessel arrival from South Africa has taken a hit. Only 0.16 million tonnes (mnt) is set to arrive at Indian ports by 5 August, the lowest in all origins, CoalMint’s vessel line-up data showed.
The volumes are much lower than weekly average shipments from the country at 0.25 mnt.
In addition, South African coal stock for portside trades, especially at Vizag port, is almost sold out and buyers who are looking for even small parcels are unable to make purchases, informed market participants.
Indian sponge iron units have changed their preference from RB2 (5500 NAR) grade coal to RB3 (4800 NAR) grade especially since last three months, as high CV coal is being booked by Europe post sanctions on Russia.
However, following the hike in steel export duty by the Indian government in late May 2022, overall demand for steel in India has turned bearish, dampening sponge iron requirement as well, thus making Indian coal buyers take a backseat from booking even RB3 grade coal.
Shipments from other-origins
Rising demand for Russian coal in the domestic market also has resulted in higher shipments from the country. A total of 0.25 mnt is arriving by next week by Grasim Industries, IMR Resources, and Rawmet Commodity.
Heavy flooding and rains earlier this month also impacted shipments from Australia. Only Adani Enterprise is set to bring a vessel of 0.17 mnt by 5 August.
Shipments from Indonesia are the highest as a total of 2.4 mnt is set to arrive at Indian ports for Adani Enterprise, Reliance Industries, and Semb Energy India Ltd and many others.
Indian buyers have been booking hefty volumes of coal from Indonesia amid stable prices since last month as inquiries from its top buyer China were subdued.
Receiver-wise thermal coal stock at ports
*Qty in mnt.
Short-term outlook
In upcoming weeks, shipments from South Africa are likely to remain under pressure amid lowered demand in India and Transnet’s scheduled annual maintenance between 12-22 July. However, shipments from Indonesia is expected to rise in the coming weeks due to the ongoing domestic coal shortage in power and non-power sectors. Russian thermal coal demand in India is likely to increase amid its cheaper availability.
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