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India:South African coal portside prices inch up, trade slows amid falling sponge iron offers

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Non Coking

BigMint Bureau

96 Reads

11 Oct 2024, 18:50 IST

India:South African coal portside prices inch up, trade slows amid falling sponge iron offers

RB3 prices edge up for the week

Port side thermal coal stock falls w-o-w

Fall in sponge prices weigh on coal inquiries

BigMint's assessment indicated that portside prices of South African thermal coal edged up this week. Prices of RB2 (5500 GAR) were assessed at INR 9,500/tonne (t), an increase of INR 150/t, while RB3 prices rose by INR 50/t to INR 7,650/t, ex-Gangavaram.

Domestic market prices appeared to have risen in line with international trends. The increase in offers was primarily driven by the resumption of the Chinese market and a decline in Indian port stocks. While the market showed an uptick at the beginning of the week, it stabilised towards the end due to the festive season. The price disparity is said to have narrowed, but transaction volumes remained low.

Non-coking coal stocks at Indian ports decreased by 1.8%, to 12.67 million tonnes (mnt) in week 40, down from 12.90 mnt in week 39 of calendar year 2024 (CY'24), according to BigMint's data. Meanwhile, India's thermal coal imports from South Africa surged by 39%, reaching 2.5 mnt in September 2024, compared to 1.8 mnt in August.

Market overview

RB3 prices edge up:RB3 (4800 NAR) offers increased by $2/t w-o-w to $71/t FOB. Meanwhile, RB2 (5500 NAR) prices rose by $2/t to $91/t FOB. Activity in the thermal coal market picked up as Chinese market participants returned following the Golden Week holidays, leading to an increase in inquiries. Suppliers raised their offer levels, anticipating a potential demand boost from China's stimulus measures. This, in turn, prompted other market participants to raise their bids in response.

India's domestic coal prices remain unchanged: BigMint's assessment shows that 4500 GCV coal stood at INR 5,700/t exw-Bilaspur, stable w-o-w, while 5000 GCV was at INR 6,500-6,900/t.

Sponge iron prices fall: Sponge iron (P-DRI) prices fell by INR 1,050/t w-o-w to INR 28,000/t exw-Raipur on 11 October.

Outlook

South African coal prices are expected to gain clarity only after market activities resume following the festivals, as most buyers are currently absent. Buying activity remains low, with both bidders and sellers choosing to stay on the sidelines, awaiting clearer price trends.