Coal news and updates

US coal stock piles up at Indian ports amidst no buyers

India Coal Market Watch

January 6: Amidst low demand and falling prices, stocks of US steam coal at many Indian ports have risen sharply or to about 1.1 million tons in the past few days, industry sources said.

Most of the material is lying at Kandla and Tuna ports; and some quantity at Mundra.

“A lot of supply is coming, but there are hardly any buyers. They are all seeking much lower prices,” sources told ICMW.

In recent weeks, Murray, Osho, Mahalakshmi, Shree and Xcoal had brought in a lot of US steam coal cargo in anticipation that demand would pick up in the winter months, they said.

Of the total stocks of US steam coal lying at various ports, about 500,000 tons belong to Xcoal, about 300,000 tons are of Shree and another 300,000 tons of Adani, Osho and Mahalakshmi taken together.

“Almost all the suppliers, who had brought US steam coal, are presently stuck as there is mismatch in offered and bid prices. Offers are not coming below $70 per ton, but buyers are not willing to bid for more than $63-64 per ton in view of the steep fall in international prices in recent days,” the sources said.

According to the source, US steam coal is being offered at Rs 5,000 per ton ex-Kandla, but buyers are looking for a price of less than that.

Explaining the reason for high stock at ports, a trader of US coal said this is happening for some time. “People had brought US coal at high prices, but then subsequently prices started falling and new cargo started arriving at low prices, which found immediate takers. As a result, the material which had come earlier at a higher price, is stuck.”

Another reason for piling up of stocks is delay in commencement by a few new brick kilns because of overall lower-than-expected demand for bricks from the construction segment, said another source.