South African coal prices have turned volatile during the month; after witnessing a sharp decline in the previous week, prices have rebounded to reach new highs.
Coal Index price API-4 has increased to USD 94.7 for Feb’18, from USD 91 in the previous week. Index for Mar’18 was assessed at USD 97.70 as on 21 Feb’18.
South African coal availability remained tight amid increasing demand from the Asian countries. Coal miners ran out of stock Feb’18 shipments, and as adverse weather had led to congestion at RBCT port. Moreover, they have limited shipments to offer for Mar’18.
A market participant in talk with CoalMint had earlier informed that the coal supply will remain affected till Mar’18, only after which the supply would normalise.
Yesterday, South African National Union of Mineworkers (NUM) had walked out of work in the Optimum coal mine owned by Gupta family, regarding the operational viability of the mining project. However, the impact of the event is less likely to have sudden effect on coal prices, on account of the ample stock available at RBCT.
Market participants were critical about the prospect of strike activity, which would only have an impact if it stays for a couple of week or so. Last year too NUM workers had threatened to go on strike regarding wage settlement, but that was soon called off after negotiation with the coal producers.
On the price front, South African 5500 NAR coal price was assessed at USD 81-82/MT, FoB Richards Bay, which was last seen during Nov’16. Coal miners had reduced the discount on this coal grade to USD 7/MT for Mar’18 shipments, citing the lower availability.
4800 NAR coal was offered at USD 66-67/MT, FoB Richards Bay, at a discount of USD 13-14/MT.
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