South African coal index has fallen marginally about 3-5% compared to last week. Although, forward index is reflecting a downtrend.
With the sign of positive hope among the coal end users, South African thermal coal forward curves are starting to point downwards. South African coal offers plunge yesterday on the grounds of weaker buying sentiments throughout the past weeks.
High South African coal prices have kept buying interest slow globally. Continuous slow demand resulted in fall of coal prices this week. Whilst, API4 index have reached to USD 94/MT, FoB on Monday and expected to decline more as the shape of the future price curve has moved towards backwardation . Besides, Indian buyers are relatively quieter as they are still struggling to find industrial viability on the current offers.
South African, RB2 coal (5500 NAR) is being offered at USD 87-88/MT CFR East Coast India for Dec’15 delivery. Meanwhile, same grade material is being offered at USD 90-91/MT CFR at Dhamra port and low GCV RB3 is being offered at USD 75/MT CFR Gangavaram Port for Dec’15 loading.
The bearish market outlook is constantly putting pressure on International miners and traders to cut their offers. It is also expected that current market situation may influence Indian sellers more to down prices further for coming weeks.
[su_quote]An East Coast based importer highlighted that “Stock and sale material of South African coal have fallen down at port, few traders, having small quantities are offering 5500 NAR coal at INR 6,800-7,000/MT CFR Gangavaram port (all duties and clearance included), and the offers can vary INR 100-200/MT port to port owing to demurrage and difference in port handling charges.”[/su_quote]
Another East Coast based trader is offering stock and sale material of RB3 (4800 NAR) at INR 6,000/MT at Krishnapatnam port. At present the sponge manufacturers prefer to purchase domestic coal and low CV imported grades.
Vessel Freight Rate
The freight of shipping coal in Panamax vessel from South Africa to East Coast of India is assessed at USD 9.5/MT. Freight has increased marginally in last one Week and is currently in the range of USD 8-11/MT for all size of bulk vessels.
However, freight rates are strengthening in the month of Nov’16 owing to limited cargo availability.
Leave a Reply