Register with us today

and in less than 60 seconds continue your access to:Latest news headlinesAnalytical topics and featuresCommodities videos, podcast & blogsSample market prices & dataSpecial reportsSubscriber notes & daily commodity email alerts

Already have an account?

Log in to register

Forgot Password

Please Note: Platts Market Center subscribers can only reset passwords via the Platts Market Center

Enter your Email ID below and we will send you an email with your password.


  • Email Address* Please enter email address.

If you are a premium subscriber, we are unable to send you your password for security reasons. Please contact the Client Services team.

If you are a Platts Market Center subscriber, to reset your password go to the Platts Market Center to reset your password.

In this list
Coal

South African thermal coal price rises, discounts begin to widen

Electric Power | Nuclear | Natural Gas | Oil | Crude Oil | Metals | Steel

Market Movers Europe, Oct 14-18: Oil markets focus on Putin's Saudi Arabia visit; Brexit looms over carbon market

Coal

Platts Global Coal Alert

Commodities | Electricity | LNG

Infrastructure Summit, Inaugural

Metals

B2Gold approves $38 million off-grid solar battery hybrid project: Suntrace

South African thermal coal price rises, discounts begin to widen

London — South African thermal coal prices rose Wednesday as lingering supply issues coupled with talk of increased buying from national utility Eskom kept sentiment bullish in the market.

Not registered?

Receive daily email alerts, subscriber notes & personalize your experience.

Register Now

Platts FOB Richards Bay 5,500 kcal/kg NAR price was last assessed at $86.10/mt Tuesday, up $6.35/mt since the start of the year and the highest level since November 2016.

However, sources were beginning to question the sustainability of current prices, saying customers in India, South Africa's biggest export destination, would be resistant to current levels.

"Prices [for 6,000 kcal/kg NAR] are crazy, above $100/mt. It's good for the producers if you can quote such a price but no one will be buying at this level," a source said.



A seller of South African coal said: "I'm honestly not sure who pays at these levels. Maybe someone who can't take alternative coals."

The sharp rise in South African coal prices has been driven by the availability of some grades of South African coal - particularly 5,500 kcal/kg NAR -- being hit by rainfall at several of the country's large open pit mines, and blending other coals to account for this shortfall has extended the supply tightness to other grades.

Also, Eskom has been looking to take additional tons out of the export market due to numerous issues with supply chain management, coal mining and the shutdown of the Gupta-owned Optimum Coal Mine earlier in the year. Eskom was not available for comment.

The price rise has created room for coal from other countries to compete for the Indian import market.

Recently some Australian 5,500 kcal/kg NAR coal was heard selling to India, but sources noted the flow of Australian coals to India was somewhat limited and would place negative pressure on South African prices rather than displace the tons long term.

"Indians are reluctant to take too much Australian coal, South Africa is the preferred origin," a broker said.

Despite this preference for South African coals, Indian buyers have been purchasing more US coal, specifically the high-CV, high sulfur North Appalachian (NAPP) coal.

Platts FOB Baltimore price, basis 6,000 kcal/kg NAR, was most recently assessed at $71.33/mt, with dry bulk Panamax freight on the US East Coast-India route pegged around $30.50/mt.

This price is comfortably cheaper than current South African levels.

A trade was concluded Wednesday morning for South African 6,000 kcal/kg NAR coal, 50,000 mt for June, at $103/mt FOB Richards Bay, making South African coal more expensive before any delivery cost.

Discounts from the benchmark South African grade 6,000 kcal/kg NAR were heard to widen over the last few days, but the subsequent rise in the benchmark price had outweighed the discounts, pushing up lower CV prices further.

--Joseph Clarke, joseph.clarke@spglobal.com
--Edited by Jonathan Loades-Carter, jonathan.carter@spglobal.com