India: Portside non-coking coal prices remain under pressure on limited inquiries

• Port stocks of thermal coal stable w-o-w
  
  
• Rains keep buying inquiries on lower side
  
  

BigMint's assessment shows that portside prices of South African thermal coal have fallen by INR 50-150/tonne (t) w-o-w. RB2 (5500 GAR) and RB3 (4800 GAR) coal prices were assessed at INR 9,600/t and INR 7,600/t ex-Gangavaram, respectively.

Trades remained on the lower side. In the ports in the eastern regions, a few offers were also heard at INR 9,300/t for RB2 and INR 7,900/t for RB3.

India's non-coking or thermal coal stocks at Indian ports were at 14.55 million tonnes (mnt) in Week 34 against 14.64 mnt in Week 33, stable w-o-w as per data compiled by BigMint.

Deals heard:

• A Panamax vessel of RB3 was sold at $89-90/t CNF.
  
  
• A vessel of RB3 for September loading was sold to India at about $88/t CNF India.
  
  

Market overview:

• RB2, RB3 prices stable w-o-w: Prices of RB3 (4800 NAR) and RB2 (5500 NAR) coal have remained stable at $74/t FOB and $93/t FOB, respectively.
  
  
• Domestic coal prices inch up amid seasonal boost: Domestic coal prices have firmed up this week. BigMint's assessment for 4500 GCV coal has risen by INR 300/t to INR 5,200/t exy Bilaspur. Meanwhile, the prices of 5000 GCV coal have been assessed at INR 6,100/t. The hike is due to the seasonal monsoon factor, the absence of auctions in Korba, central India, and a noticeable uptick in market demand.
  
  
• Sponge iron prices edge up w-o-w: Sponge iron (P-DRI) prices edged by INR 100/t w-o-w to INR 24,850/t exw-Raipur on 30 August.
  
  
• Better response in domestic coal auctions: Domestic end-users are focusing more on domestic coal considerations currently. Additionally, Coal India Limited (CIL), India's domestic coal supplier, has decided to reduce the earnest money deposit (EMD) for its single-window mode agnostic e-auction to encourage broader participation. CIL plans to provide more coal for power plants than its annual contracted quantities (ACQs), whose maximum threshold was earlier 120% of the ACQs. Moreover, following a recent update, CIL will now face penalties if it fails to supply coal through e-auctions. This change aims to increase CIL's supply capacity while maintaining its market relevance. The adjustments are designed to ensure that contracts are fair and equitable, particularly as CIL faces growing competition from commercial mining and private players. CIL's e-auction sales climbed by 69% m-o-m to 6.50 mnt in July against 3.80 mnt in June on the back of larger buyer participation for domestic coal.
  
  

Outlook

Portside prices of South African thermal coal are expected to remain under pressure due to weak demand from the industrial sector amid ongoing rains and lower buying interest. The current supply-demand dynamics indicate a cautious market stance, with participants reluctant to engage in deals due to ample stock levels and weather-induced disruptions.