India: South African RB2 price at Krishnapatnam port falls on rising inventory

The stock and sale offers for RB2 (5000 kcal/kg) grade thermal coal at Krishnapatnam port this week are assessed in the range of INR 4300-4400/t, down by INR 100-200/t w-o-w, amid an increase in thermal coal inventory at the port.

As per CoalMint's weekly stock report, in week 31 (26-30 Jul), non-coking coal stock at Krishnapatnam port surged by almost 200% w-o-w basis from 0.63 mn t in Week 30 (19-24 Jul) to 1.90 mn t in Week 31. Party-wise highest surge in stock was recorded by Penna Cement followed by India Cement.

Between 27 Jul-12 Aug, Krishnapatnam port is reportedly set to receive the highest quantity of thermal coal shipments of 0.55 mn t, as revealed in CoalMint's vessel-lineup data.

The average stock and sale offers for RB2 at other ports remains unchanged w-o-w basis. Offers at Gangavaram port is hovering at around INR 4,100 - 4,200/t, Vizag at INR 4,200/t, Kandla at INR 4,600-4,650/t and Haldia at INR 5,100/t, excluding Cess and GST.

South African export offers to India rise

• South African thermal coal export offers to India has observed an increase of USD 2-3/t in the first week of August. The API index for RB1 grade coal is assessed at $ 56.4/t, FoB basis.
  
  
• CoalMint has reportedly heard a deal for RB2 grade coal at $41.5/t, FoB RBCT port basis for August loading, and delivery at Gangavaram port. Whereas RB3 grade coal export offer is assessed at $35/t, FoB basis for August shipments.
  
  
• The freight between RBCT and India's Gangavaram port is at $11.5/t.
  
  

• The discount for RB2 grade coal is reported to be between $11-12/t and that for RB3 it is at $13-14/t.
  
  

Thermal coal stock at port increases by 6% w-o-w

• As on 31 Jul'20, the non-coking coal stock at Indian ports was recorded at 16.9 mn t against 15.9 mn t in its previous week.
  
  
• Mundra port has the highest stock of thermal coal at 2.70 mn t followed by Gangavaram (2.44 mn t), and Kandla (2.19 mn t).
  
  
• The highest stock volume at various ports is maintained by Adani Power (1.80 mn t) and Adani Enterprise (1.79 mn t).
  
  

Outlook: CoalMint Analysis

Export offers from South Africa are unlikely to see any major increase in the ongoing month post this week's rise.

The large inventory of stock at ports, along with the volume of coal shipments expected to reach Indian ports and unlikelihood of a significant increase in domestic demand amid monsoons are the major factors that should keep a check on the seaborne as well as the stock and sale prices.