India’s demand for South African grade has fallen currently, only a handful of traders and buyer are keen to take position in volatile market.
South African coal prices are volatile amid festive season left market muted this week. South African coal bid offers driving down with high discount for Jan’17 shipments. Although, index forward curve is persistently moving downtrend.
South African coal index have shoot up again this week and assessed yesterday at USD 86.3/MT (6000 NAR, API4) for Jan’17 shipments. South African 6000 NAR coal is being offered at USD 84/MT, FoB Jan’17 loading. While 5500 NAR and 4800 NAR coal is offering at USD 72-73/MT and 55-56/MT, FoB respectively.
[su_quote]An Indian importer commented, “owing to higher cost and festive season the market is being hampered and only a handful of traders and buyer are active in the market now. While, in India buying inquiries are negligible and not even asking for negotiations.”[/su_quote]
South African coal offers are more or less firm at the upper side, 5500 NAR coal is being offered at USD 81-82/MT, CFR East Coast. While, low GCV South African RB3 (4800 NAR) is available at USD 64-65/MT, CFR. High CV 6000 NAR coal, barely traded in India is assessed at USD 93-94/MT, CFR India.
Indian sponge manufacturers, the conventional buyers of South African coal have reduced buying in Dec’16. Persisting higher offers, increased domestic availability amid demonetization effect in the country deterred regular buying from the sector. Also Indian inquiries are coming for very small quantities now.
SteelMint assessed that on the current scenario sponge utilities prefer to opt domestic material rather than imported as aggressive participation witnessed in CIL monthly auctions. It is also noted that more than 25% quantity of total sold were opted by sponge utilities in Dec’16.
In India stock and sale material quantity has increased at East Coast Ports. An addition, offers has been falling persistently owing to downtrend in global prices and lack of buying interest amid cash crises in the domestic market.
Few traders are offering 5500 NAR coal at 6,500/MT CFR Dhamra port. While, Paradip, Gangavaram and Manglalore offers heard at INR 6,300/MT (all duties and clearance included). Low CV South African 4800 NAR is offering at INR 5,300-5,400/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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