India: Bulk coal freight rates rise on improved demand

• Rise in cargo booking on improving demand from power plants
  
  
• Approaching summer increases enquiries
  
  

Coal freight rates increased this week. Coal import volumes have increased due to a surge in power demand resulting from the onset of summer. Significantly, the Indian government has extended the mandate for imported coal-based power plants to operate at full capacity until 15 October, 2024, anticipating high electricity demand during summer and heatwaves. This have resulted in increased imports and, consequently, coal stocks at the ports.

Route-wise details:

• South Africa to India freight rates rise w-o-w: Freight rates for coal shipments from the Richards Bay Coal Terminal (RBCT) to Paradip, India, are currently at around $19.5/tonne (t), an increase of $2.02/t w-o-w on 18 April, as per BigMint's assessment. Demand from sponge iron producers has improved, resulting in hike in enquiries. However, Transnet has released a draft maintenance plan for the North Corridor to support future coal exports, as it handles a majority of RBCT's coal export volumes. The corridor is scheduled to undergo annual maintenance from 9 July- 18 July this year, which may impact exports during that time. This may support buying inquiries in the near short term.
  
  
• Australia-India freight rates inch up w-o-w: Freight rates from Australian ports increased w-o-w for Indian ports. As per BigMint's assessment, coal freight rates from Port HayPoint, Australia, to Paradip, India, were recorded at $18.3/t, up by $0.17/t w-o-w. Demand from India was muted, with several end-users having their requirements covered and maintaining significant inventory levels. Indian steel players showed little urgency in procuring additional cargoes, preferring to rely on spot purchases if necessary, due to a lack of demand in the finished steel market.

  An enquiry has been recorded as fixed this week, with SAIL booking a panamax vessel for 75,000 t of metallurgical coal from HayPoint Port, Australia, to Vizag and Haldia at around $19/t. The shipment is scheduled for 15-24 May, sources informed.
  
  

• Indonesia to India freight rises w-o-w: Freight rates for coal shipments from East Kalimantan to Paradip stood at $13.8/t, up by $0.95/t w-o-w today. In India, enquiries from coastal power plants increased due to a surge in power demand. Demand from India is expected to increase in the coming days due to the ongoing summer.