Constant volatility in South African coal prices have been affected buyers’ decision as current offers seem to be at higher levels.
South African coal market reflecting a better outlook so far as offers have unchanged this week, also forward index on higher side. Presently, South African RB2 (5500 NAR) is being offered at USD 50-51, CFR India for May’16 loadings. But, buyers are expecting minimum discount of USD 3-4/MT with a bid of USD 47-48/MT, CFR India.
A West Coast based trader is offering 5500 NAR coal at USD 50/MT, CFR Kandla for May’16 loading. At present, FoB offers are heard at USD 43/MT, but buyers’ bids are received at USD 41-42/MT levels. Meanwhile, he is also offering 4800 NAR at USD 41/MT, CFR India.
However, South African 6000 NAR is less in demand now as cheap alternatives have taken its place in Indian market. Current offers are assessed at USD 59/MT at Kandla port. in Addition one big trader at Dhmra port is offering at USD 60-61/MT, CFR for May’16 first week loading.
A market participant highlighted, “Currently, there is lack of cargoes for Apr’16 loadings and most offers are available for May’16 shipments. In India, there are bulk takers of 5500 NAR coal yet. However, rise in South African spot offers, cheap alternatives and rising freight rates have prevented upswing in demand.”
He also added, South African coal bound to fall in coming days as highly volatile market is hindering buyers to take any call now. We are getting call for May’16 shipments as buyers are investigating market for better deal as planning restocking for monsoon.
Moreover, it is expected that Indian monsoon restocking will pick up buying from first week of April. Contrastingly, customers are expecting price fall nearly, after closer of Japanese tender, which was one of the major reasons behind sudden price hike by big miners.
One East Coast based trader reported to offer ready to sell 5500 NAR South African coal at INR 4,100-4,200/MT at East Coast ports (all duties and clearance included, taxes will be added further).
South African coal import to India
India, a largest shipped destination for South African grade, is recorded about 29% hike in coal import during the first 11 months of the fiscal. The country had imported about 31 MnT of coal during Apr’15-Feb’16 against 24.1 MnT registered last year for the same period.
Moreover, it is to be noted that Indian sponge manufacturers still require imported South African 5500 NAR coal as other available grades is not most suitable for sponge units in terms of price and GCV specification.
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