South African Coal Offers Remain Overpriced

South African thermal coal offers remain overpriced after hitting highest level last week. Current offers are assessed at USD 52-53.3/MT, FoB Richards Bay. Contrastingly, higher offers are not finding position in the market.

South African coal 5500 NAR, largely preferred by Indian sponge utilities, is being offered at USD 44-45/MT, FoB for Jun’16 and Jul’16 loadings; still prevailing at higher side. Only notable demand is seen from the end users, which is quite supportive but oversupplied market isn’t reflecting certainty for higher prices so long.

However, it is to be noted that ship movements increased by 40-50% at West Coast Indian ports during last 15 days. This may raise monthly import quantity at west India. On the other side, East Coast based ship movement fell marginally during the same period.

A West Coast based trader mentioned that South African coal market has moved up and will remain same in forward trading. Contrastingly, prompt offers appear under pressure as continuing heavy negotiations through buyers, following lower physical trade in India.

He also added, South African 5500 NAR coal is being offered at USD 53/MT, CFR Kandla Port for Jun’16 shipments. Meanwhile, upcoming cargoes in Jun’16 end are available at USD 54/MT, CFR at Mangalore Port.

In India, traders are offering South African 6000 NAR at USD 60-61/MT, CFR Kandla but physical trade is witnessed at USD 59-59.5/MT. While, South African low GCV 4800 NAR coal is being offered at USD 43/MT at Kandla Port.

[su_pullquote align=”right”]One trader commented, “Nothing has majorly changed in last couple of weeks. South African coal offers still remain overpriced on the grounds of ample supply and limited buying. However, other origin cheaper material is grabbing India’s interest”. [/su_pullquote]

At present, ready to sell material of 5500 NAR coal is available at INR 4,500/MT at Magalore Port, loaded on trucks basis. Whilst, the same grade material is being offered at INR 4,400/MT (all duties and clearance included, taxes will be added further) at Krishnapatnam Port.

Similarly at Kandla port, about 50,000 MT USA origin 7,200 GAR thermal coal is being offered by Delta Global at INR 5,000-5,100/MT (all duties and clearance included, taxes will be added further), loaded on truck basis.