South African coal offers again witnessed a marginal hike of about USD 1-2/MT on weekly basis for Sep’16 loading. Volatility in South African coal market continue to keeps buyers aside.
South African thermal coal price rally continue on upside reflecting a bit higher price again this week. Offers are up marginally by USD 1-2/MT, FoB for current bookings which has resulted in slowing interest among the major taker of South African grades in the globe.
South African 5500 NAR coal is assessed at USD 55-56/MT, FoB for Sep’16 loadings. While, 4800 NAR is being offered at USD 45/MT, FoB Richard’s Bay.
In context to India, CFR offers have surged on the wake of increased FoB offers coupled with growth in bulk sea freight market, which compelled Indian buyers to keep themselves away from South African coal trading. Although, using Indonesian and domestic grades seems more viable for Indian utilities.
Current offers for 5500 NAR coal is hovering at USD 64-65/MT, CFR Gangavaram and Pardip Port for Sep’16 shipments Whilst, low CV South African coal 4800 NAR is available at USD 52-53/MT, CFR East Coast ports.
[su_pullquote align=”right”]Some Indian traders, based at East Coast India commented that “Volatility in South African coal prices deterring Indian buyers to take any position since couple of weeks. While trader are also not ready to bear any risk over fluctuating coal market.“[/su_pullquote]
Constant rise in South African coal prices resulted into falling imports in India. India have been importing at an average about 3.7 MnT coal from South Africa per month since Feb’16. Whilst, in Jul’16 monthly imports have fallen by 8.5% as compared to Jun’16. As per SteelMint analysis, it is also noted that import will go down more in the coming time.
Ready to sell offers at ports
On the other side, owing to rising imported offers, Indian East Coast based traders are eyeing on profit margins and holding South African coal stock at ports as they are looking to sell material at higher prices.
• Stock and sale offers have also increased at Indian ports about INR 100-200/MT. South African 5500 NAR coal ready to sell material is offering at INR 5,200/MT at Paradip Port (taxes will be added further).
• Low CV South African 4800 NAR is available at Mangalore port at INR 4,500/MT (all duties and clearance included, VAT & CST will be added further).
Moreover it does not seems viable for Indian sponge units to opt higher priced imported material. While, on the current scenario, traders and end-users both are hoping for market stability which will make feasibility on trade.
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