India: South African portside thermal coal prices fall amid high stocks, weak demand

• Increased arrivals contribute to increased stocks
  
  
• Domestic coal prices decline by INR 50/t w-o-w
  
  

India's portside prices of South African thermal coal declined this week due to increased port stocks and subdued demand. BigMint's assessment showed that RB2 (5500 NAR) prices dropped by INR 50-100/t to INR 9,350/t, while RB3 (4800 NAR) prices fell by INR 50/t to INR 7,800/t, both ex-Gangavaram. Weak buying sentiment further contributed to the market's downturn.

Thermal coal stocks at Indian ports increased by 2.3% to 13.29 million tonnes (mnt) in week 50 from 13 mnt in week 49, as per BigMint's data. While demand remained stable, improved arrivals contributed to increased stock levels at several ports.

Market overview

RB3 prices drop slightly w-o-w: South Africa's indexed RB3 (4800 NAR) offers fell w-o-w to $68/t FOB, down by $0.50/t. Meanwhile, RB2 (5500 NAR) prices eased slightly, declining by $0.50/t to $88/t FOB.

Domestic coal prices drop further: India's domestic coal prices continued to decline this week. BigMint's assessment showed that 4500 GCV coal was at INR 4,900/t, down by INR 50/t w-o-w, while 5000 GCV coal stood at INR 6,200/t, a drop of INR 200/t, exw-Bilaspur. Buyers are delaying purchases, expecting further reductions with upcoming CIL subsidiary auctions.

Sponge iron tags rise w-o-w: Sponge C-DRI exw-Rourkela prices were assessed at INR 26,550/t, up by INR 600/t w-o-w. Prices rose earlier in the week amidst improved trades and steel price support in anticipation of imposition of safeguard duty in steel imports.

Outlook

Domestic coal's price competitiveness continues to pressure demand for imported RB3. However, prices may stabilise in the near term if imports remain limited and portside stocks decline.