South African coal prices have exhibited a sharp decline this week following in the footsteps of Australian coal prices. The benchmark index for South African coal prices, API-4, has fallen by around USD 4/MT from the previous week, to USD 91/MT for Feb’18 shipments. Market participants have also reported trades at levels of USD 88/MT for Mar’18 shipments.
South African coal prices had maintained stability during month of Jan’18, with API-4 index hovering in the range of USD 96-97 during the month.
The price index API-4, in general, is affected by the movement in Australian coal prices; whenever the coal prices in Australia increases, South African prices also increase and vice-versa.
Australian thermal coal prices had softened this week due to slow buying from China, which eventually pulled down South African coal prices as well. Moreover, the fall in global commodities market also adversely affected the coal prices.
On the supply side, coal availability for 4800 NAR and 5500 NAR material is expected to remain tight till Mar’18. While, the demand from European countries continued to remain sluggish. Earlier, South African miners had assured that coal supply would be regularised in Apr’18, as per the information shared by the market participants in talk with CoalMint.
At present, discount of USD 8-9/MT on index price, was offered for 5500 NAR coal, whereas 4800 NAR coal was available at a discount of USD 14-14.5/MT. Accordingly, South African 5500 coal was assessed at USD 75-76/MT, FoB Richards Bay and 4800 NAR coal at USD 62/MT, FoB Richards Bay.
An Indian trader had commented that the positive growth in the steel industry had resulted in firm demand for coal from the Non-power sector, which would be maintained in the coming months. However, on the back of increased domestic supply, he was confident that the higher South African coal prices won’t sustain for long.
South African 5500 NAR coal was offered at USD 88-89/MT, CFR India. 4800 NAR coal was available for USD 75/MT, CFR India.
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