A slightly weaker Rand helped offset weaker physical and financial coal markets. The rest of the energy complex strengthened slightly, with carbon enjoying a nice rally, which favoured natgas prices. However, physical coal markets also held their own as uncertainties around Chinese imports vs. domestic production prevail.
Uncertainties also persist in India as some eastern coal states seek to delay auctioning of their coal blocks to private mining interests for up to nine months, concerned about poor auction results as the Covid-19 pandemic continues.
Meanwhile, China keeps shutting its older, smaller mines, whilst improving the overall performance and economics of its domestic coal sector, always playing the longer, strategic game under centralised control.
An apparent train derailment, of seventeen wagons on a 200-wagon train, close to Richards Bay, halted deliveries for a short while to the terminal last week. However, this hardly moved the needle on export prices as supply is clearly not a constraint at the moment.
Meanwhile, parts of SA are seeing “load-reduction” initiatives from Eskom as recent winter peak-loads have exceeded available generation supply capacity. Coal stocks on the ground remain healthy.