India: South African portside thermal coal prices fall further amid oversupply, weak demand

• Thermal coal port stocks up marginal 0.5% w-o-w
  
  
• Domestic coal prices decline in recent auctions
  
  

India's portside prices of South African thermal coal dipped further this week due to increased port stocks and subdued buying sentiment ahead of the holidays. RB2 (5500 NAR) prices fell by INR 100/t to INR 9,250/t, while RB3 (4800 NAR) dropped by INR 50/t to INR 7,750/t, both ex-Gangavaram. Frequent auctions by Coal India Limited (CIL) subsidiaries also added to market oversupply.

Thermal coal inventories at Indian ports recorded a slight increase of 0.5% to 13.35 million tonnes (mnt) in week 51 from 13.29 mnt in week 50, according to BigMint's data.

Market overview

RB2 prices decline: South Africa's RB2 (5500 NAR) offers dropped w-o-w to $86/t FOB, down by $2/t. RB3 (4800 NAR) prices also fell, easing by $2/t to $66/t FOB. Market participants noted increased interest in the RB4 coal brand, though demand remains relatively subdued.

Domestic coal prices fall amid ongoing CIL auctions: BigMint's assessment shows 4500 GCV coal dropped by INR100/t to INR4,800/t, while 5000 GCV coal declined by INR400/t to INR 5,600/t, exw-Bilaspur. Sentiments remained cautious due to the fall in bids in CIL subsidiary auctions and fall in sponge iron prices.

Sponge iron tags drop w-o-w: Sponge C-DRI exw-Rourkela prices were assessed at INR 26,200/t, down by INR 350/t w-o-w. Buying was impacted by sluggish movement in the semi-finished and finished steel segments, leading to further reductions in offers.

Outlook

Weak demand driven by the holiday season and ample domestic coal availability is likely to persist. Any recovery in imported prices hinges on a drawdown of port inventories in early 2025.