South African coal price has extended its upward journey this week as the lingering issue of supply tightness kept sentiments bullish in the market.
South African coal index API-4 had moved up USD 4 since crossing the 100 USD mark earlier this month. Coal Index ApI-4 was assessed at USD 104.65 for Jun’18; market participants had reported that there was not much coal availability for May’18.
Coal supply has been affected as a result of the continual backlog shipments. Besides, low production of 5500 NAR material, had caused miners to blend 6000 NAR and 4800 NAR material, thereby extending the supply tightness of these grades as well.
Coal Offers Rises despite Higher Discounts:
The increase in coal index was likely to incite higher discount from the miners. Accordingly, the prevailing discount for 5500 NAR coal was raised from USD 5/MT to USD 7/MT, whereas discount for 4800 NAR coal was heard at USD 13-14/MT.
However, the subsequent rise in API-4 had outweighed the discounts, driving the coal offers higher this week.
South African 5500 NAR coal was offered at USD 89-90/MT, FoB Richards Bay, while 4800 NAR coal was offered at USD 72-73/MT on FoB Basis.
An Indian trader was critical of the high coal offers, which were likely to limit Indian coal buying from South Africa. He commented that the buyers were looking for alternative, with coal from Indonesia, US and Australia all available at cheaper price than the South African material.
The last trade for South African 5500 NAR was heard at USD 96/MT on CFR Basis for a Capsize vessel, however, the current price had moved up USD 4/MT on CFR basis, assessed at USD 100/MT for a capsize vessel.
Stock and Sale offer for 5500 NAR coal was quoted at INR 7800/MT (exlusive of GST and Compensation cess) at Paradip port.
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