The recent plunge in freight rates has re-opened the price arbitrage for SA coal to move into Asia, sparking renewed interest from Chinese buyers, trade sources said, according to a Reuters report carried by Hellenic Shipping News. However, industry sources cautioned China’s demand for coal imports has weakened considerably over the past two months, and that it was unlikely that there would a mad rush of orders for SA coal that was seen earlier this year. A trader said he had just sold a July-loading SA cargo into China at about US$107 a tonne this week. The coal has a heating value of 6 000 kcal/kg. For South African coal, FOB prices at Richards Bay port are hovering at US$90 a tonne. Combined with freight rates of US$16-US$17, their landed price into China stands at about US$107 a tonne. Including the coal import tax of 17%, Chinese buyers are now able to buy SA material at as much as US$3-US$4 per tonne cheaper than domestic supplies, which are of poorer quality.
