South African coal prices are moving in line with the rising Australian thermal coal prices. Of late, Supply tightness due to intermittent strikes has curbed coal production at mines owned by Glencore and have given support to the Australian coal market.
Also, crackdown on illegal mining and pollution in China has curbed domestic supplies, and lower hydro power output has boosted demand for coal fired generation, forcing up prices.
Newcastle coal index which has reached USD 98.3 for Aug’17 has pushed South African coal index API-4 to 6-months high levels of USD 87.60 this week.
Coal Miners in South Africa were also facing supply tightness as they had to deal with backlogs and low production of 6000 NAR coal. Spot offers for 5500 NAR coal was offered at USD 72/MT, FoB Richards Bay, while that for 4800 NAR coal price was assessed at USD 58/MT, FoB Richards Bay.
Indian Market Scenario:
Indian demand for South African coal has been decreased in the recent months. According to the CoalMint Research, Coal imports in Jul’17 has fallen 11.24% M-o-M to 2.92 MnT, compared with 3.29 MnT in Jun’17.
Market Participants are anticipating that buying activity will pick up after the month of Aug’17 when rainy season is over.
One West Coast based Indian trader had told there is a stock of 0.1 MnT coal available at Mangalore port which is going to increase to 0.15 MnT, after the arrival of few more vessels. He has quoted stock and sale offer for 5500 NAR coal at INR 6100/MT in Mangalore port, loaded to truck.
Meanwhile, offers for 5500 NAR coal was heard at USD 83-84/MT, CFR India. While for 4800 NAR coal price was assessed at USD 69-70/MT, CFR India.
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