India: Portside imported South African coal prices stable w-o-w

• Sellers heard reducing offers on low buying interest
  
  
• Rail maintenance delay may boost RBCT portside stocks
  
  

Prices of the South African RB2 (5500 GAR) coal in the Asian market remained stable w-o-w at INR 10,100/tonne (t) ex-Gangavaram. Prices of RB3 (4800 NAR) at Gangavaram Port were recorded at INR 8,200/t, down INR 100/t w-o-w. Deals were heard concluded for about 8,000 t of RB2 at INR 9,950-10,000/t at Vizag Port. Indian demand for South African coals remains on lower side and portside prices are expected to continue down-trending.

Some sellers were heard to have reduced their offers amid low buying interest. Cargos of RB3 were less in the market. However, sellers were also not interested in stocking up due to low demand for the same.

South African non-coking (thermal) coal export shipments were at 30.41 million tonnes (mnt) in January-June, 2024 or the first half (H1 CY'24) compared to 30 mnt recorded in H1CY'23, up over 1% y-o-y. Exports of the same rose by 4.42% m-o-m to 4.96 mnt in June 2024 as against 4.75 mnt in May 2024. Indian imports from South Africa in June were stable on a monthly basis at 2.67 mnt.

Factors impacting prices

South African prices down w-o-w: Portside prices of RB3 (4800 NAR) have dropped by $5/t and are assessed at $73/t FOB. Also, RB2 (5500 NAR) prices fell by $2/t to $93/t FOB.

Rail maintenance schedule: South Africa's Transnet Freight Rail's (TFR's) annual maintenance on the coal line has been delayed by two weeks to 23 July-1 August. Supplies to the port have been impacted by frequent derailments, cable thefts, network failures, and broken tracks along the North Corridor line. The two-week delay in maintenance will enable TFR to increase rail deliveries to RBCT, thereby boosting port stocks to meet export demand during the maintenance period.

Sponge iron prices inch up w-o-w-Sponge iron (P-DRI) prices improved by INR 50/t w-o-w to INR 25,700/t exw Raipur on 5 July. However at the beginning of this week, sponge prices increased to INR 26,250/t but later retreated owing to lack of trade.

Outlook

South African portside coal prices may continue to move in a limited range on lower buying interest and fall in offer levels. Besides, rising stocks at Indian ports have kept imports on the downside. Thermal coal stocks at Indian ports stood stable at 16.27 mnt last weekend compared to 16.26 mnt a week before.