South African Non-coking Coal Prices remain Stable with Minor Fluctuations

The South African thermal coal prices (especially RB2 and RB3 grade) remained flat this week while RB1 grade prices observed a plunge of USD 4/MT w-o-w basis.

The non-coking coal prices of grade RB1 is trending at USD 85/MT this week, grade RB2 is at USD 63-65/MT, whereas RB3 it is at USD 49-51/MT, FoB basis at RBCT port, South Africa for March loading. The discounts for RB2 are heard to be at USD 9-11/MT and that of RB3 is at USD 15-18/MT.

Panamax dry-bulk shipping freight rates from the Richards Bay Coal Terminal (RBCT) to India are in the range of USD 14 to 14.5/MT whereas, for that of capsize, it is in the range of USD 11-11.5/MT.

The domestic prices of thermal coal from South Africa is heard to be in the range of INR 6,000-6,250/MT (ex-Gangavaram and ex-Krishnapatnam) ports.

Market sentiments

After the dramatic fall in coal usage by European countries in past three years amid environmental concerns, South African coal is increasing its presence in the Asian market with India being one of its prime export destinations.

According to the market sources, Indian sponge iron industry (that uses imported thermal coal from South Africa) is currently dealing with tepid demand amid the falling billet prices which like sponge iron can also be used in electric furnaces for steel production. The buyers in the Asian market are currently in wait and watch mode also because of the Wuhan virus outbreak in China and are currently not making very active buying resulting in price stability in the thermal coal prices.

SteelMint has also heard from its sources that the Indian buyers made relentless bidding for the South African thermal coal in the last week of Jan'20 and first week of Feb'20 when the Coronavirus outbreak was at its peak, in anticipation of unknown future in the coming days ahead. Thus, India's non-coking coal imports are likely to register an increase in February and March month.