The global market turmoil seems to be taking toll on the South African thermal coal as the index prices have fallen further this week by USD 5-6/MT.
While the Coronavirus pandemic has crippled the functioning of many economies, the oil war that started between two of the world’s oil-producing powerhouses, Saudi Arabia and Russia has sent the global market into spiral and weaker currencies.
India which accounts for about 60% of South Africa’s total thermal coal exports is currently facing demand slack from its sponge iron sector amid financial year closing in the month of March and also from cement sector which is a key thermal coal consuming sector. According to the market sources, the rising cases of Cornoavirus in India is likely to further impact the domestic steel and construction sector in the coming weeks ahead. Apart from this, the currency depreciation of various economies including that of India amid the oil war is also making imports costlier thus compelling buyers to adopt wait and watch mode.
“We are concentrating more on selling stock in hand given the low demand especially from the cement sector and thus are not making any bookings further given the uncertain future outlook for coming weeks”, said a trader based in Bellary.
The prices for RB1 grade South African coal are heard to be in the range of 75/MT, RB2 in the range of USD 61-62/MT and that of RB3 in the range of USD 51-52/MT for March end and April loading. All prices are in CNF India basis.
The fright charges from South Africa to India for capsize vessel has dropped down to around USD 7-8/MT and that of panamax it is around USD 10-11/MT. The stock and sale price of South African thermal coal at India’s Gangavaram port is heard to be around INR 5,500/MT and at Krishnapatnam port it is around INR 5,700/MT.
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