Tight supply in South African coal markets is helping to boost Atlantic markets according to global energy, petrochemicals, metals and agriculture information provider S&P Global Platts.
Due to supply issues, Richards Bay coal sat at US$99 per metric tonne and Atlantic coal physical prices gained $1 this past week despite quiet activity during the Chinese holiday period, with Colombian product being offered at US$87 per metric tonne.
“With South African coal supply getting tighter and prices higher, Colombian coal might end up as an option for Indian buyers,” a European trader told Platts. He noted strong spot demand from Indian and Pakistan buyers who were looking for higher calorific value coal than typical Indonesian coal.
Platts spokesperson Jeffrey McDonald added that freight differences – and heat value considerations – between Colombia and South Africa to India would factor into the arbitrage.
