Business Line reported that at a time when miners worldwide are complaining of a slowdown in demand, thermal or steam coal prices have shot up nearly 18% in last month in South Africa.
South Africa is India’s second largest source of imports, after Indonesia. In 2011 India imported approximately 65 million tonnes of coal from Indonesia and 17 million tonne from South Africa, for electricity generation.
Between November 1 and November 30, the price of 6,000 kilo calories (net, as received) of South African coal increased by nearly 17% from USD 77 a tonne to USD 90. Prices further inched up by USD 1 to USD 91 a tonne in the first two days of December.
What makes the development interesting is that South African coal prices are rising without any significant demand growth from India and China.
That the overall market mood is subdued is also verified by the relatively stable price of Indonesian coal. The price of 4,200 kcal (gross as received) common Indonesian variety inched up from USD 37.9 a tonne to USD 38.5 during the same period.
Reports suggest there is hardly any evidence of major supply disruption in South Africa, except that the government authorities are considering a proposal to levy taxes on coal exports to ensure cheaper supplies to domestic industry.
Source – Business Line