South African thermal coal prices remained range-bound amid lack of prompt demand along with availability concerns as the flurries of spot deals seen in recent weeks appear to have subsided.
The export outlook of seaborne thermal coal from South Africa continues to remain bearish, largely in part due to subdued buying interest observed in the main export destination of India.
Nevertheless, India-based end-user buyers are more inclined towards South African thermal coal as compared to Indonesian coal of similar heating value; although at present they tread carefully with utmost caution amid the ongoing monsoons. The seasonal monsoon rains is affecting the dispatch of cargoes from ports along the western coast of India.
India’s seaborne buying interest will stay tepid until September, as buyers are heard adopting a wait-and-watch stance because they are well stocked due to their active pre-monsoon restocking in Q2 2019.
Richards Bay discounts
Discounts from the financial 6,000 kcal/kg NAR market to export grades of physical coal had not moved much in recent weeks, being heard around USD 7.50/MT for the 5,500 kcal/kg NAR grade.
Discount for the 4,800 NAR grade was assessed at USD 11/MT.
Dry Bulk Freight Assessments
Panamax dry-bulk shipping freight rates from the Richards Bay Coal Terminal (RBCT) to the East and West Coasts of India are USD 14.65/MT and USD 14.40/MT respectively.
PRICE ASSESSMENTS
RB1 (6,000 kcal/kg NAR) coal is assessed at around USD 55.49/MT FOB Richards Bay.
RB2 (5,500 kcal/kg NAR) coal is assessed at around USD 48.17/MT FOB Richards Bay.
RB3 (4,800 kcal/kg NAR) coal is assessed at around USD 39.24/MT FOB Richards Bay.
For Indian buyers, the above offers amount to USD 70.00, 62.70 and 53.77/MT respectively, considering an average freight rate of USD 14.53/MT for delivery by Panamax vessel class.
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