India: Imported South African thermal coal portside prices remain stable

Offer levels drop amid limited buying interest

In the Asian thermal coal market, prices of RB2 (5500 GAR) remained stable w-o-w at INR 9,400/t ex- Gangavaram. However, prices for RB3 (4800 NAR) coal at Gangavaram Port were recorded at INR 7,900/t, unchanged w-o-w. Furthermore, monthly prices of RB2 (5500 GAR) rose by INR 900/t compared to INR 8,500/t in February 2024.

Slow demand persisted in the Asian thermal coal markets despite reduced availability from March to the first half of April-loading cargoes. Offer levels declined due to limited interest from the largest buyer, India. As the week progressed, sentiment softened further. Increased domestic production added to the subdued market, resulting in fewer enquiries throughout the week.

Domestic production-

State-run miner Coal India Ltd (CIL) continued its robust performance in terms of production in February. CIL's production rose by 9% y-o-y to 74.8 mnt in February as against 68.8 mnt in February 2023. During the month, coal dispatches posted a rise of 12% y-o-y to 65.3 mnt compared to 58.3 mnt in February 2023.

Deals this week-

• According to market participants, a deal of RB2 (5500 NAR) coal was heard concluded for 3,000 t at INR 9,400/t at Mangalore port.
  
  
• Another deal was heard involving the sale of 2,000 t of RB3 coal at INR 7,800/t ex-Vizag port.
  
  
• A transaction for Supramax vessel of RB2 coal was completed at $97/t FOB Richards Bay.
  
  
• Another deal was concluded from Vizag port for 5,000 t of RB2 (5500 NAR) at INR 9,300/t.
  
  

Sponge iron prices

Sponge iron prices rose by INR 300/t w-o-w to INR 26,600/t exw Raipur on 22 March fuelled by increased buying activity. This uptick reflects robust purchasing, with buyers actively securing material in response to rising offers. Consequently, trading volumes surged compared to the previous day, particularly in the central Indian markets of Raipur and Raigarh, where bulk bookings were reported.

South African prices

According to sources, portside prices of RB3 (4800 NAR) coal remained stable w-o-w and are currently assessed at $66/t FOB. Similarly, RB2 (5500 NAR) remained unchanged w-o-w and are currently assessed at $82/t FOB.

Outlook

South African thermal coal import prices are anticipated to remain unchanged significantly in the near term as offer levels decrease due to limited market enquiries. Nonetheless, the constrained availability of cargoes may provide support to prices.