India: South African thermal coal portside prices extend decline amid muted buying
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- Port stocks remain comfortable
- Domestic coal dominates demand
South African thermal coal prices continued to soften as weak steel demand, subdued sponge iron activity and comfortable domestic coal availability weighed on imported coal sentiment. Lower prices failed to revive enquiries, with most consumers continuing requirement-based purchases while traders struggled to liquidate existing inventories. Market participants indicated that nearly half of the sponge iron units in some regions remained shut, further limiting imported coal demand.
As per BigMint's assessment as on 2 July 2026, ex-Paradip RB2 (5,500 NAR) declined by INR 200/t w-o-w to INR 10,600/t, while RB3 (4,800 NAR) dropped by INR 200/t to INR 9,400/t. At Vizag, RB2 fell by INR 150/t to INR 10,450/t, while RB3 decreased by INR 200/t to INR 9,300/t.
India's thermal coal inventories at major ports declined by 1.6% w-o-w to 14.83 mnt in Week 26 from 15.07 mnt in Week 25. The decline reflected steady cargo evacuation by power plants and industrial consumers. However, inventories remained comfortable as fresh vessel arrivals at several ports offset part of the drawdown.
Lower prices fail to revive enquiries
Market participants reported that buying activity remained extremely weak despite another correction in South African coal prices. The market largely remained in a wait-and-watch mode, with no meaningful improvement in enquiries or counter bids. Traders stated that FOB RBCT offers for 5,500 NAR were heard around $89/t, although buyers continued resisting purchases.
Participants noted that traders were finding it increasingly difficult to sell coal already available at Indian ports and were therefore reluctant to book fresh vessel cargoes. Dispatches remained sluggish, while most buyers preferred purchasing only immediate requirements. Spot transactions were limited, with reported trades including 2,000 t of RB3 at INR 8,500/t and 5,000 t of RB2 at INR 9,800/t from Mangalore port, along with 10,000 t of RB3 at INR 9,000/t from Krishnapatnam port.
Domestic coal continues to pressure imports
Domestic coal remained the biggest challenge for imported coal suppliers. BigMint assessed 5,000 GCV coal stable at INR 5,500/t, while 4,500 GCV coal remained unchanged at INR 4,050/t w-o-w.
Comfortable domestic availability, regular Coal India subsidiary auctions and competitive pricing continued to encourage consumers to source coal domestically. Although port inventories declined marginally during the week, supply remained adequate, keeping imported coal procurement largely requirement-based.
Weak sponge iron market weighs on sentiment
The sponge iron market weakened further during the week. PDRI DAP-Durgapur prices declined by INR 100/t w-o-w to INR 23,500/t.
Market participants reported a wider bid-offer gap, resulting in fewer trade negotiations and limited deal closures. Buying remained restricted to immediate requirements as weak downstream steel demand continued to affect procurement. Lower trade volumes and the absence of bulk bookings prompted suppliers to adopt a more flexible pricing approach, although overall sentiment remained cautious.
Outlook
The South African thermal coal market is expected to remain subdued in the near term. Weak sponge iron economics, sluggish steel demand and abundant domestic coal availability are likely to keep enquiries and trade volumes limited throughout the monsoon season. Traders expect sellers to remain under pressure as existing inventories remain difficult to liquidate, reducing interest in booking fresh cargoes. Market participants believe a meaningful recovery in imported coal demand is unlikely before the monsoon ends or unless downstream steel demand improves significantly.
