After rising sharply last month, South Africa’s total thermal coal export shipments registered a 9% m-o-m fall to 5.4 million tonnes (mn t) in Nov’21, as volatility in prices compelled key buyers to postpone their major purchases.
South African RB1 (6000 NAR) grade prices fell as much as $113/t during mid-Nov’21, before rising to $161.3/t as of 25 Nov’21. By the end of the month, RB1 prices were trading at $135/t.
The volatility in South African coal prices came with the Chinese government’s intervention to fix domestic coal prices, fluctuations in natural gas rates, and a sudden spike in Omicron cases across several countries.
SA exports to China up manifold
Shipments to major destinations in Asia were lower last month, while exports to China registered a sharp rise of 168% m-o-m to 1.2 mn t.
Export shipments to China rose sharply last month as utilities rushed to book cargoes amidst lower vessel availability from Indonesia due to supply disruptions and on the expectation of inventories drying up in the winter season.
Over the last few years, China had not been a major buyer of South African coal amid several issues of trace elements. However, post-the ban on Australian coal imports in the latter half of last year, the country has been buying at regular intervals to meet its domestic demand.
Export shipments to India unchanged
South African export shipments to India were largely unchanged on a m-o-m basis and stood at 1.74 million tonnes (mn t) in Nov’21. The subdued booking came against the backdrop of lower end-user demand as they awaited a further price correction before making any major bookings.
Also, the domestic coal supply scenario improved significantly last month after an acute shortage seen over Aug-Oct’21 eased with national miner Coal India redirecting more coal towards the non-power sector.
Coal dispatches to the sponge iron sector rose by 43% m-o-m to 0.63 mn t, as per Coal India’s data. The Indian sponge iron sector is the top consumer of South African coal.
Exports to other countries decline
South African coal export shipments to Pakistan were recorded at 0.50 mn t, down over 40% m-o-m amid fluctuating global prices.
Coal shipments to South Korea also fell to 0.15 mn t, down 83% m-o-m as traders inclined more towards LNG procurement. As per industry reports, the country’s LNG imports are expected to rise by 7% m-o-m in Nov’21.
After rising sharply over the last few months, export shipments to the Netherlands fell 38% m-o-m to 0.36 mn t in Nov’21 as gas supply from Russia picked up last month.
Outlook
CoalMint believes South African coal exports to various countries are likely to remain in a tight range in the upcoming month due to the limited availability of cargo on the back of logistics maintenance issues. Demand from major countries is also seen subdued amidst anticipation of further fall in prices and improvement in domestic coal supplies, especially in India and China.
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