South African coal prices remain under pressure amid persisting weak demand

• Bid-offer disparity persists, port stocks range-bound
  
  
• South African coal export indices fall
  
  
• Indian domestic coal prices rise further
  
  

BigMint's assessment indicated that portside prices of South African thermal coal remained largely stable, with RB2 (5500 GAR) and RB3 (4800 GAR) assessed at INR 9,400/t and INR 7,600/t ex-Gangavaram, respectively.

However, a few sellers were reportedly offering RB2 at lower levels, around INR 9,200/t. The market currently favours buyers, as sellers are holding ample stock, putting downward pressure on prices.

Non-coking or thermal coal stocks at Indian ports decreased by 2.05% w-o-w to 13.10 million tonnes (mnt) in week 37 of calendar year (CY'24), down from 13.37 mnt in week 36, according to data compiled by BigMint.

Deals captured by BigMint:

• A deal for 5,000 tonnes (t) of RB2 was heard to be concluded in Ennore Port at INR 9,000/t.
  
  
• A Panamax vessel of 5700 NAR was heard to be sold at $94-95/t, FOB South Africa.
  
  
• A importer sold about 5,000 t of RB2 at INR 9,500-9,600/t at Haldia Port.
  
  
• About 10,000 t of RB2 were sold at Krishnapatnam Port at INR 9,200/t.
  
  

Market overview

• RB3 prices edge down w-o-w: Prices of RB3 (4800 NAR) declined by $1/t to $69/t w-o-w FOB. RB2 (5500 NAR) prices remained stable at $89/t FOB.
  
  
• Domestic coal prices rise w-o-w: Domestic coal prices have risen this week. BigMint's assessment for 4500 GCV coal has increased by INR 500/t to INR 5,700/t exw Bilaspur (including royalty, DMF and NMET), while 5000 GCV coal was assessed at INR 6,600/t. The price hike is attributed to a limited quantity of material in auctions and seasonal constraints.
  
  
• Sponge iron prices edge up w-o-w:Sponge iron (P-DRI) prices rose by INR 650/t to INR 25,400/t w-o-w exw-Raipur on 20 September.
  
  

Outlook

South African coal prices remained mostly stable, with limited buying interest keeping the market subdued. Adequate port inventories have curbed any potential price hikes, while increased competition among sellers has put downward pressure on prices. As buyers maintain a stronger position, the market is likely to witness further price declines in the near future.