India: Portside South African coal prices dip on weak domestic steel prices

• Sponge iron prices edge down w-o-w
  
  
• Domestic coal prices fall in recent SECL auction
  
  

BigMint's latest assessment shows that portside prices of South African thermal coal edged down w-o-w. RB2 (5500 NAR) was assessed at INR 9,500 per tonne (t), down INR 50/t, while RB3 stood at INR 7,600/t, ex-Gangavaram, down INR 100/t. Prices have fallen in line fall in prices of sponge iron.

Offers for RB3 from a few buyers were heard at levels above INR 8,000/t as well. Buyers preferred being on the sidelines on expectation of a price drop. Import vessels were heard to be less especially of RB3 on muted demand and low buying interest.

India's appetite for imported coal has weakened due to robust domestic coal supplies and reduced seasonal demand for coal-based power. Consequently, stockpiles at ports have risen. Additionally, declining domestic steel prices have further dampened interest in South African thermal coal.

Thermal or non-coking coal stocks at Indian ports remained relatively stable, edging down by just 1.17% to 11.85 million tonnes (mnt) in week 46 from 11.99 mnt in week 45, as per BigMint's data.

Market overview

• RB3 prices range bound w-o-w:RB3 (4800 NAR) offers remained unchanged w-o-w at $70/t FOB. RB2 (5500 NAR) prices edged down w-o-w at $88.5/t FOB.
  
  
• India's domestic coal prices fall in recent auctions: Domestic coal prices fell this week by INR 400-500/t following the SECL auction on 19 November. According to BigMint's assessment, the price for 4500 GCV grade dropped to INR 5,500/t, while 5000 GCV grade fell to INR 6,800/t exw-Bilaspur. The auction saw 12 lakh tonnes of coal on offer, with the market showing usual buying activity despite the price decline.
  
  
• Sponge iron prices drop down: Sponge iron (P-DRI) prices fell by INR 150/t w-o-w to INR 25,350/t exw-Raipur on 22 November.
  
  

Outlook:

The Indian market for imported South African coal is likely to remain subdued in the near term due to sufficient domestic coal availability, stable prices, and lukewarm demand from key sectors like sponge iron and steel.

Buyers are expected to remain cautious, anticipating further price corrections. Thermal coal stockpiles at ports may stay elevated unless demand picks up, while domestic coal prices are likely to remain steady. Any significant market revival will depend on a rebound in domestic steel prices or seasonal demand fluctuations.