chit chat

Coal from Richards Bay has dropped 0.50c USD.

An Indian trader bought a Capesize cargo of South African Richards Bay thermal coal early Wednesday at $103.45/mt FOB.

The level of the transaction, executed during the Asia-Pacific trading window via online trading platform globalCOAL, was 45 cents above overnight levels.

Platts 90-day Richards Bay FOB prices have been in a downtrend over the last few weeks, easing down to $103/mt at the close Tuesday, an eight-week low.

Traders said sellers of South African coal were having to reduce their offers in order to compete with those of lower-priced US and Colombian material in India and China.

(Notice the Colombian mention ;)

One Switzerland-based trader said Indian spot buying had been "steady" since January, but added that so far he had not noticed any ramp-up in traded volumes, with the country expected to build its stocks ahead of its monsoon season later this year.

A second source said that with Indian coal trading firms earlier this month being awarded significant imported coal supply contracts, "we could see increased Indian activity in the spot market."

Indian trading house Adani won a 4 million mt coal supply contract with state-run utility NTPC while state-run traders MMTC and MSTC bagged a tender to supply Tamil Nadu Electricity Board with 1.05 million mt of imported coal.

Now....

Continental Coal is looking beyond southern Africa just as other mining companies are stepping in.

The ASX listed miner expects to strike a deal for a coking coal asset in Colombia this year as part of a strategy to diversify its portfolio and boost its share price, which has been weighed down by a political debate in South Africa about nationalizing mines. (Debate no longer a concern!)

Mr Jason Brewer executive director told Deal Journal Australia that “Getting into coking coal and getting into production very quickly [in Colombia] is on the cards for Continental Coal.” He said that a move is very likely this year.

Mr Brewer said that the company has been approached by companies willing to back the move in exchange for securing output. He declined to name the companies that Continental has been holding talks with, but did say it wouldn’t partner with EDF SA, which helped underpin its development in South Africa with an agreement to buy exported thermal coal. (EDF is to Europe focused for this gig - they want Asia)

Continental Coal has focused on thermal coal up to now, bringing the Vlakvarkfontein and Ferreira mines in South Africa into production and with two more in development in the country (Penumbra / De Witts). The biggest of these new projects, the De Wittekrans Complex, could produce up to 10 million tonnes of run of mine coal annually within a couple of years.

You could trade this stock alone for the next 3 years ;)