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Indian thermal coal: Delivered 5,500 NAR prices range-bound on strong freight rates

Increase font size  Decrease font size Date:2014-09-05   Views:531
Strong freight rates kept delivered prices for 5,500 NAR range-bound, even as tight supply of South African was met with limited demand, sources said Thursday.

Sources also said there were a few offers for Australian coal but not many deals were getting concluded.

"Australian coal is getting competitive and is providing tough competition to South African coal," an India-based trader said, adding that the continued uncertainty in the Chinese market had created bearish sentiment that had pressured Australian coal prices downward.

A second India-based trader said there was demand for Australian 5,500 kcal/kg NAR coal from the sponge iron industry and September-loading baby Capesize cargoes of this grade were being offered at $71.50/mt CIF east coast India.
He added that offers for September-loading Capesize cargoes of South African 5,500 kcal/kg NAR coal were at $75-76/mt CIF east coast India.

A third India-based trader said there was demand for South African 5,500 kcal/kg NAR on the east coast, as well as some parts of west coast India from sponge iron industries but noted that he had not heard of any recent deals for this grade. He pegged the price of a Panamax cargo of South African 5,500 kcal/kg NAR at around $75-76/mt CFR east coast India.

Meanwhile, an end-user in India said that while FOB prices of South African coal were weakening, landed price remained stable at $75-76/mt CFR east coast India, Panamax basis, because freight rates were going up. He said his company was covered until mid-November.

The first India-based trader said availability of South African material remained limited, thus allowing some Australian coal offers to possibly fill the gap in Indian demand for high-CV coal.

A Singapore-based trader said the limited amount of South African material available in the market could be stemming from the bottleneck at Richards Bay rail network.

Platts assessed the 30-60 day prices for CFR India West at $76.20/mt, down 30 cents on the day, and CFR India East 5,500 kcal/kg NAR coal at $75.40/mt, down 30 cents on the day.

INDONESIAN OFFERS

Sources noted that deals for imported thermal coal were hard to come by as buyers continued to bargain for lower prices.

The third India-based trader said he was negotiating a deal for a Supramax vessel of 4,200 kcal/kg GAR offered at $48/mt CFR east coast India for loading in the second half of September, but buying interest was around $46/mt CFR.

A fourth India-based trader reported that he had sold a Panamax shipment of 4,200 kcal/kg GAR to an Indian buyer at around $47/mt CFR east coast India and the vessel had already arrived last week. He was now looking to buy a Handymax or a Supramax for October loading but he has not yet received any offers from Indonesian suppliers.

With the freight rate for Supramax hovering around $10.50-11/mt on Indonesia-east coast India route, he said the CFR cost of this shipment would be at around $47.75-48.25/mt.
 
 
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