South African coal offers fragile in current week and also expected to decline further in upcoming months.
South African coal prices have been replicating a range-bound trend over the first quarter of FY16. India’s highly preferred grade by sponge plants, South African RB2 (5500 NAR) has been offered at an average range of 61-63/MT CFR India over the past three months (Apr-Jun’15) of this fiscal.
On Monday, South African high GCV RB1 coal (6000 NAR), index prices dipped sharply to USD 59.5/MT FoB for delivery in July’15 which was traded at USD 61.5/MT in previous week. Meanwhile, market has persistently followed a backward trend as South African same grade material is offered at USD 59/MT and USD 58.9/MT for August and September bookings respectively.
The prices have been reflecting a rather stable outlook as the market suffers from low demand as well as excess supply worldwide. On the other hand, the market has seen a huge gap between demand and production, as global demand failed to match pace with supply.
Current offer of South African RB2 is assessed at USD 61-62/MT CFR East Coast for July end delivery. Same material is being offered by Adani Enterprises at USD 66/MT CFR Dhamra port.
An East Coast based trader highlighted, “South African RB2 ready to sale material is offered at INR 4500-4600/MT at Vizag Port (All duties and clearance included). Contrastingly, the same material is being offered at INR 4800/MT at Paradip Port owing to additional demurrage cost.”
India’s stock & sale coal prices at different ports have also turned down sharply in last few weeks owing to low demand coupled with sufficient stock. Almost stable trends have prompted miners and traders to come out with comparatively low offers.
Few market experts anticipate that prices may strengthen by the end of the year, as many global producers have curbed their supply to regain a better position.
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