Indian portside thermal coal prices remain unchanged w-o-w on subdued demand

• Sponge iron price drop continues to pressure coal prices
  
  
• FOB prices edge up following Transnet maintenance
  
  

Prices of the South Africa RB2 (5500 GAR) coal in Asian markets remained stable w-o-w at INR 9,650/t ex-Gangavaram. Prices of RB3 (4800 GAR) at Gangavaram and Vizag ports were recorded at INR 7,700-7,750/t, unchanged w-o-w.

Indian industrial demand remained weak due to persistent rains in several regions, which caused construction projects to grind to a halt. However, some demand for low-CV coal cargos were heard in the market. It is expected that demand may pick up in the latter half of the month after the rains start to subside.

Despite supply disruptions in domestic mines amid heavy downpour, imports have continued to be remain low on subdued demand.

Non-coking or thermal coal stocks at Indian ports were at 14.37 million tonnes (mnt) in week 30 as against 15.36 mnt in week 29, a decline of 6% w-o-w, as per data compiled by BigMint.

A deal for 12,000 t of RB3 was heard done at INR 7,750-7,800/t at Vizag port.

RB3 prices edge up w-o-w: Prices of RB3 (4800 NAR) coal have edged up by $1/t to $75/t FOB. Also, RB2 (5500 NAR) prices also inched up by $1/t to $95/t FOB. The prices up on rail line scheduled maintenance at Transnet.

Sponge iron prices down w-o-w:Sponge iron (P-DRI) prices dropped by INR 300/t w-o-w to INR 24,950/t exw Raipur on 2 August.

Outlook

South African coal prices are expected to stay subdued on decreased demand and declining sponge prices. Ongoing Transnet maintenance has led to a price rise in the FOB market. Continued pressure on the coal market may drag prices down.