South African thermal coal prices have inched up this week on the back of a recent flurry of spot trades concluded for the 6,000 kcal/kg NAR grade.
Moreover, the South African export market might encounter supply tightness for two weeks in mid-July, due to scheduled annual maintenance works on the Transnet rail lines serving the country’s main coal export terminal at Richards Bay.
Emerging concerns over these upcoming logistical issues might potentially lead to some incremental trading activity in the form of speculative purchases.
Furthermore, strong persistent demand from state-owned electricity utility Eskom has kept domestic availability tight, providing further support to prices for coal exports out of South Africa.
Meanwhile, demand for South African coals from its largest export destination, India, has turned lukewarm with the onset of the monsoon off-season.
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.
South African Discounts
The discount for 5,500 kcal/kg NAR coal remained relatively unchanged compared with the last week, at around USD 7.50/MT from the financial 6,000 kcal/kg NAR grade.
However, discount for the 4,800 NAR grade has narrowed down to USD 10.75/MT.
PRICE ASSESSMENTS
RB1 (6,000 kcal/kg NAR) coal is assessed at around USD 59.64/MT FOB Richards Bay.
RB2 (5,500 kcal/kg NAR) coal is assessed at around USD 52.80/MT FOB Richards Bay.
RB3 (4,800 kcal/kg NAR) coal is assessed at around USD 43.48/MT FOB Richards Bay.
For Indian buyers, the above offers amount to USD 72.64, 65.80 and 56.48/MT respectively, after charging an average freight rate of USD 13/MT for Panamax vessel class.
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