The API index as well as RB2 grade South African coal offers to India have remained almost stable since past few weeks amid lacklustre domestic demand.
- TheRB2 grade (5500kcal/kg) price CFR India (Gangavaram port) is reported to be at $50-51/t whereas RB3 grade (4800 kcal/kg) price is at $43-44/t.
- The discounts for RB2 grade coal are being heard at $13-14/t and for RB3 grade the same is around $16-17/t.
- The freight for panamax vessels is reported to be at 11.5/t and capsize vessel is at $10.5/t for Gangavaram port.
Our conversation with various channel partners has revealed that the demand for imported thermal coal in India continues to remain tepid amid short-span (7-10 days) of lockdown in various states and increased availability of domestic coal due to aggressive selling by CIL (Coal India Ltd).
Stock and sale price:
- CoalMint has heard of a recent trade deal of 25,000 tRB2 grade coal at Gangavaram port being sold at INR 4,100-4,200/t to sponge sector in Central India and RB1 grade being sold at INR 4,900-4,950/t.
- In Krishnapatnam port RB2 grade coal is being offered in the range of INR 4,200-4,300/t and RB3 is at 3,800/t.
July’s coal vessel update:
In India, the quantity of coal being imported in July is likely to see a marginal rise against June at 2.72 mn t with highest quantity booked by Adani followed by Swiss Singapore and IMR Resources, according to vessel line-up data maintained by CoalMint.
Stock at Indian ports:
- Thermal coal stock at Indian ports stood at 15.4 mn t as on 16 Jul’20, up by 1.67% w-o-w basis and on same day last year, it was recorded at 11.28 mn t.
- Highest stock of 2.47 mnt is reported to be at Gangavaram port followed by Kandla (2.35 mn t), Mundra (2.27 mn t) and Paradip at 1.20 mn t.
- In Gangavaramport, material of many players is stocked up whereas in Mundra port out of 2.27 mn t about 50% is held by TATA’s CGPL power plant.
Outlook
- Amid the increasing uncertainty due to rising cases of COVID-19, South African coal export offers to India are unlikely to observe any uptick before September end.
- In case of domestic coal usage vis-à-vis imported ones, there is a mixed response of industry participants.
- While some believe that aggressive selling of domestic coal (in the form of special auctions for importers) by CIL may encourage the industry users to opt for domestic coal, some opine that given the quality issues in domestic coal, imported coal would continue to be the preferred option, especially by sponge sector.
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