The spot offers of South African coal have been falling since couple of weeks on the wake of slow demand by Indian sponge makers.
South African prices are noticeably less volatile since couple of weeks as index (6000 NAR) reflecting at the range of USD 84-85/MT, FoB. Despite, subdued coal offers, Indian trade still slow owes to lack of purchases by sponge units.
However Indian steel sector is largely struggling with demonetization as 50% of the transaction is made in cash.
Commented by an Indian trader, “Indian sponge manufacturers were deterring to participate on highly volatile South African coal market earlier. At present falling offer is good for them but still higher and lack of stability is disturbing. Also they are to run over their inventory but waiting for more market stability.”
South African 6000 NAR coal is being offered at USD 82/MT, FoB Dec’16 loadings. While 5500 NAR and 4800 NAR coal is offering at USD 72/MT and 57-58/MT, FoB respectively.
“One West Coast Based Importer highlighted that South African coal prices are falling slowly but demand is not as strong as earlier. On the current trade outlook, it is expected that prices will come down further.”
In India, South African RB2 coal (5500 NAR) is being offered at USD 80-82/MT CFR Mangalore and Gangavaram for Dec’16 loadings. Meanwhile, low GCV RB3 is being offered at USD 68/MT CFR Gangavaram Port for Dec’16 loading.
Stock and sale material of South African coal has come down sharply at ports owing to cooling global offers. Few traders, having small quantities are offering 5500 NAR coal at INR 5,800-5,900/MT CFR Mangalore port (all duties and clearance included). While 4800 NAR is offering at INR 4,900-5,000/MT at the same port, the offers can vary INR 100-200/MT port to port owing to difference in port handling charges.
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