India: Portside South African coal prices remain steady; weaker currency to support import offers

• Thermal coal port stocks rise w-o-w
  
  
• INR hits a new low of 87.6 this week
  
  

Portside South African thermal coal prices in India remained under pressure this week due to weak demand and an absence of firm offers. RB2 (5500 NAR) coal prices dropped by INR 50/t to INR 8,650/t, while RB3 (4800 NAR) remained stable at INR 7,250/t at Gangavaram Port. Prices have remained under pressure and deals of nearly 20,000 t were recorded by BigMint at prevailing offer levels.

Market activity has been subdued for the past four-five days, with no fresh inquiries and limited trade volumes. Traders are holding on to existing stocks while buyers anticipate further price drops before making purchases.

Additionally, high port inventories and cheaper domestic alternatives have kept imported coal prices from rising. Most buyers are relying on existing stockpiles rather than entering new deals. Despite lower South African coal export prices, there has been little movement in Indian portside prices, as traders resist further cuts in an already weak market.

Thermal coal inventories at Indian ports increased by 2.4% to 13.66 million tonnes (mnt) in week 5 of CY'25 from 13.34 mnt in week 4, as per BigMint data.

Market overview

South Africa's export prices edge up: South Africa's RB2 (5500 NAR) coal export offers increased by $1/t w-o-w to $82/t FOB, up from $81/t last week, while RB3 (4800 NAR) rose by $0.5/t to $62/t FOB, compared to $61.5/t last week.

Domestic thermal coal prices rise: Domestic thermal coal prices in India have remained range-bound this week. 4500 GCV coal prices have been assessed at INR 5,000/t, while 5000 GCV rose by INR 50/t to INR 5,950/t, both exw-Bilaspur. Prices may either stay unchanged or soften after the next SECL auction, depending on demand trends.

Sponge iron prices decline: Sponge C-DRI prices were assessed at INR 25,700/t exw-Rourkela, down INR 500/t w-o-w.

Outlook

Portside South African thermal coal prices in India may continue to face downward pressure unless demand picks up significantly. Sponge iron manufacturers and other key consumers remain hesitant to make bulk purchases, awaiting further price reductions. Selling pressure from traders looking to offload stocks may push prices down in the coming weeks.

On the other hand, INR depreciation against USD is likely to push up import offers, which in turn may support portside prices in the near term, sources highlighted. Notably, the INR is currently trading at 87.5 against 85.8 seen in early January.