South African coal index further rise and witnessed at USD 65/MT yesterday; rising offers limited demand for new shipments in India.
South African thermal coal offers still following upward trend and rose by USD 3-4/MT compared to last month. 5500 NAR coal is offering at USD 51-52/MT, FoB for Aug’16 loadings and 6000 NAR cargo at USD 61-62/MT, FoB.
Indian buyers were in hope that prices will fall down after the end of maintenance work in South African ports, but market is still moving up which is limiting demand in India. At present Indian traders are offering 5500 NAR at USD 58-59/MT, CFR East Coast ports for Aug’16 shipments. While low CV 4800 NAR coal is being offered at USD 44-46/MT, CFR India.
Endless rise in South African thermal coal price seems to be fade craze in the Indian market. India took around 70% thermal coal of South African total shipments. But at present, paying higher price for the sponge grade coal is not viable for the manufacturers whereas domestic coal is available at comparatively low offers.
Indian imports of South African coal have fallen by 12% in Jul’16 compared with Jun’16.
One trader highlighted, Earlier Indian utilities were holding their positions as expecting for price correction in near term, but current price level is hovering at higher end which is not supporting South African coal buying.
Also added, there is no such fundamental reason behind constant hike in index. Paper trading can be one of the major driver lifting South African coal market up.
An Indian trader mentioned, At Indian Eastern ports, there is enough stock level of South African coal at 1 MnT approx. Thus, the stocked coal is available at USD 2-3/MT lower than fresh material.
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