India: Imported South African thermal coal portside prices rise w-o-w
...
Low inventories at RBCT kept prices supported
Muted trading activities amid rising domestic production
In the Asian thermal coal market, prices of RB2 (5500 GAR) rose by INR 100/t w-o-w to INR 9,400/t ex- Gangavaram. However, Prices for RB3 (4800 NAR) coal at Gangavaram Port were recorded at INR 7,900/, rose by INR 100/t w-o-w. Furthermore, monthly prices of RB2 (5500 GAR) rose by INR 800/t as compared to INR 8,600/t in February 2024.
Lower inventories at RBCT port sustained prices, with limited activity reported from South Africa. As the week progressed, sentiment softened. Rising domestic production further reduced enquiries throughout the week.
Richards Bay Coal Terminal stocks at 2.31 mnt raise concerns of cargo loading slowdown. Inventories have declined 25% from 3.09 mt a month earlier. Limited rail capacity led RBCT shareholders to depend heavily on coal reserves. Transnet cites adverse weather, power outages, and cable theft impacting railings to RBCT.
Domestic production-
State-run miner Coal India Ltd (CIL) continued its robust performance in terms of production in February 2024. CIL's production rose by 9% y-o-y to 74.8 mnt in February 2024 as against 68.8 mnt in February 2023. During the month, coal dispatches posted rise of 12% y-o-y to 65.3 mnt compared to 58.3 mnt in February 2023.
SA exports-
India was the largest buyer of South African coal at 1.91 mnt in February 2024, down 8% m-o-m as against 2.08 mnt in January 2024. Some coastal power plants, as well as steel and cement sectors, were directing their inquiries to South African coal, driven by its attractive prices and smoother supply situation. Despite sluggish overall demand for India's thermal coal in the spot market attributed to ample port stocks.
Sponge iron prices
Sponge iron prices dropped by INR 450/t w-o-w to INR 26,300/t exw Raipur on 18 March 2024. Central regions like Raipur and Raigarh experienced active bookings at reduced prices, resulting in decreased offers and bids. This pressured suppliers across regions, despite limited spot transactions elsewhere during the week.
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-wand are currently assessed at $82/t FOB.
Outlook
The South African thermal coal import prices are expected to rise amid declining inventory in Richards Bay coal terminal.Nonetheless, increased domestic production and limited trading activities might exert downward pressure on prices.
