SA coal prices enjoyed a volatile week, initially selling off in tandem with the rest of the market, before rallying strongly after Transnet’s force majeure declaration, owing to weather conditions from tropical storm Eloise.
RBCT stocks are currently around 2.8Mmt, with around 10 vessels currently waiting to berth. Suppliers have withheld offers from the market due to a lack of train availability in the Ermelo area.
Despite lower demand owing to warmer weather and Chinese new year festivities, benchmark power coal prices in China have shifted higher, with the BSPI at around US$98.50.
Indonesia is also registering higher prices, with its HBA index at around $87.80/mt for February, as Chinese buyers scrambled to stock up before the Lunar New year holidays.
Exxaro’s Mxolisi Mgogo has stated that the company will no longer invest in coal assets. One wonders if this includes life of mine extensions and expansions for coal supplying Eskom.
With the ownership fragmentation happening in the SA coal sector, and several smaller operations coming to their end of life, the potential SA coal supply cliff circa 2025-2030 is growing ever larger.