Indian demand for SA coal on the rise

Indian buyers are increasingly looking for higher calorific value thermal coal from South Africa according to global energy, petrochemicals, metals and agriculture information provider, S&P Global Platts.

“The advantage of shorter sailing times and Capesize freight rather than Panamax effectively allows Indian buyers to import South African coal at a cheaper rate than US-origin North Appalachian coal (NAPP).

A Europe-based trader of South African coal told Platts that US NAPP coal had been priced out of the market, while Indonesia was tight on availability due to rainfall limiting mining activity and most available cargoes being booked by the Chinese ahead of the Lunar New Year. Both the US and Indonesia are India’s two key import sources.

“Indian buyers typically purchase South African coal with heating values ranging from 4 200 to 5 500 kilocalorie/kilogram NAR - and sellers said enquiries for these specifications had also increased due to problems with dispatches of domestically produced coal in India,” said Platts spokesperson Joseph Clarke.

He added that domestic coal in India was high on ash and moisture and the logistics costs were too high.

A producer-trader of South African coal told Clarke that this firm demand from India was expected to hold in the mid to long-term as state-owned producer, Coal India Limited, was not likely to meet its production targets, having missed them in 2017.

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