South African thermal coal prices have gained strength as of late—notwithstanding their prolonged decline in the past six months—boosted by firmer demand from main export market India as buyers replenish stock levels ahead of the monsoon season.
At present the South African thermal coal market is witnessing re-emerging demand from Indian buyers after weeks of prolonged down surge, which is prompting the sellers to lower discounts issued for 5,500 kcal/kg NAR coal on the 6,000 kcal/kg NAR price.
Moreover, Indian traders stated that supply of South African thermal coal cargoes is quite tight as Eskom, the country’s electricity public utility, was heard to have ramped up coal procurement.
This increased consumption of domestic utility Eskom has created a favorable arbitrage that has continued to tighten availability of the commonly exported grades 4,800-5,500 kcal/kg NAR.
Notably, global thermal coal markets have continued on a downward pricing trajectory since the spike in commodity prices in September-October last year.
PRICE ASSESSMENTS
RB1 (6,000 kcal/kg NAR) coal is assessed at around USD 70/MT FOB Richards Bay.
RB2 (5,500 kcal/kg NAR) coal is assessed in the range of USD 57-59/MT FOB Richards Bay.
RB3 (4,800 kcal/kg NAR) coal is assessed in the range of USD 45-47/MT FOB Richards Bay.
For Indian buyers, the above offers amount to USD 83, 72 and 59/MT respectively, after charging an average freight rate of USD 13/MT for Panamax vessel class.
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