India: Portside South African thermal coal prices remain under pressure amid high stocks, slow trades

• Indian port stocks rise for 3rd straight week
  
  
• Sponge iron prices down by INR 150/t w-o-w
  
  

India's portside prices of South African thermal coal showed mixed trends w-o-w, under pressure from elevated stocks and slow trades. RB2 (5500 NAR) fell slightly by INR 50-100/tonne (t) to INR 9,400/t. However, RB3 (4800 NAR) rose by around INR 200/t to INR 7,850/t ex-Gangavaram, driven by tight stock availability and limited imports.

Thermal coal stocks at Indian ports increased marginally by 2% to 13.00 million tonnes (mnt) in week 49 from 12.74 mnt in week 48, according to BigMint's data. This is the third consecutive week that portside stocks have risen.

"Sponge iron manufacturers have reduced capacity utilisation, given thin margins owing to falling long steel prices. This has slowed down inquiries for portside thermal coal," stated a trader.

Market overview

• RB3 prices drop slightly w-o-w: South Africa's indexed RB3 (4800 NAR) offers decreased w-o-w to $68.50/t FOB. RB2 (5500 NAR) prices remained unchanged w-o-w at $88.50/t FOB.
  
  
• Domestic coal remains stable w-o-w: India's domestic coal prices remained unchanged this week, as buyers waited for further reductions. BigMint assessed 4500 GCV coal at INR 5,000/t and 5000 GCV coal at INR 6,450/t, both exw-Bilaspur. Prices are expected to decline further, nearing bid levels, which could lead to increased buying in the weeks ahead.
  
  
• Sponge iron tags soften: Sponge iron (P-DRI) prices declined by INR 150/t w-o-w to INR 24,450/t exw-Raipur on 12 December. Prices had earlier risen w-o-w, to INR 24,600/t on 7 December.
  
  

Outlook

Domestic coal remains competitive, limiting RB3 demand. However, RB3 prices may rise further due to low imports and stock shortages.