South African 5500 NAR coal, mostly preferred by Indian sponge manufacturers in steelmaking has retreated to USD 59-60/MT CFR India.
South African RB2 (5500 NAR) coal prices have seen a marginal fall again by USD 1-2/MT in this week owing low buying interest in India and constantly falling demand in the global market. Currently, RB2 coal is being offered at USD 59-60/MT CFR East Coast India for Aug’15 delivery. Meanwhile, same grade material is being offered at USD 60-61/MT CFR at Dhamra port and low GCV RB3 is being offered at USD 52/MT CFR Gangavaram Port for Aug’15 end delivery.
The current index of RB1 have also reached to USD 57.5/MT on Monday and expected to decline more as the index forward price is reflecting a down trend.
On one hand, the international miners and traders commented that prices will not go down more from the current level as they’re already at bottom, since the beginning of 2015. On the other hand, the prices have been fallen sharply on the ground of declining domestic demand coupled with sharp decline in steel prices in India. Steel prices declined about INR 1,000-1,400/MT in the last one week.
The bearish market outlook is constantly putting pressure on International miners and traders to come out with low offers. It is also expected that current market situation may influence sellers more to down prices further for coming weeks.
An East Coast based trader highlighted, “Stock and sale material of South African 5500 NAR (RB2) coal is being offered in the range of INR 4,600-4,800/M CFR Krishnapatnam ports (all duties and clearance included), the offers can vary port to port owing to demurrage and difference in port handling charges.”
Adani Enterprises highlighted that about 20,000 MT material of South Africa RB2 and 60,000 MT of RB3 (4800 NAR) is available for ready to sale and offering at INR 4,800-4,900/MT and INR 4,350/MT at Dhamra port. The same grade material offers are comparatively high at Haldia port.
Also mentioned that currently offering South African RB2 material at INR 4,650/MT and RB3 is at INR 3,950/MT at Gangavaram port respectively.
Another East Coast based trader is offering stock and sale material of RB3 (4800 NAR) at INR 4,200/MT at Krishnapatnam port. At present the sponge manufacturers prefer to purchase Low GCV South African material.
Vessel Freight Rate
The freight of shipping coal in Panamax vessel from South Africa to East Coast of India is assessed at USD 12/MT. Freight has increased marginally in last one month and is currently in the range of USD 8-14/MT for all size of bulk vessels.
However, freight rates are strengthening in the month of July’15 owing to limited cargo availability. At present, the bulk size cargo freight market is going forward owing to stronger capesize, panamax and supramax rates since the beginning of July’15.
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