Pricing of South African thermal coal exports from the country’s Richards Bay terminal experienced steep drops this week, especially as Indian demand for seaborne cargoes has lately turned lackluster, possibly owing to sufficient stockpiles at power utilities.
Up until recently, however, Indian demand for South African coal has seen a significant rise in the number of spot bookings in recent months, with buyers actively restocking ahead of the June-September monsoon season.
Notably in 2018, just under half of South Africa’s coal (48% of RBCT exports) was received by India – South Africa’s largest customer for thermal coal.
While South African coal is favored for superior quality, in comparison to supplies from the world’s largest thermal coal exporter Indonesia, but it’s nevertheless worth mentioning that high prices for South Africa’s coal exports had been crimping demand previously in the main export destination of India.
Meanwhile, strong domestic demand from state-owned electricity utility Eskom has tightened supply of the commonly exported grades — providing support to prices for coal exports out of South Africa.
PRICE ASSESSMENTS
RB1 (6,000 kcal/kg NAR) coal is assessed in the range of USD 58.39-62.25/MT FOB Richards Bay.
RB2 (5,500 kcal/kg NAR) coal is assessed in the range of USD 49.00-51.56/MT FOB Richards Bay.
RB3 (4,800 kcal/kg NAR) coal is assessed in the range of USD 39.40-40.20/MT FOB Richards Bay.
For Indian buyers, the above offers amount to USD 73.32, 63.28 and 52.80/MT respectively, after charging an average freight rate of USD 13/MT for Panamax vessel class.
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