India buys above 1 million tonne of South African coal in May

Thursday, 16 Jun 2011

Exporter sources said that India took 1.3 million tonnes or 36% of South Africa's thermal coal exports in May, little changed from 1.2 million imported in April.

India's percentage share of South Africa's exports rose from 25% the previous month but this reflected the fall in total exports rather than any significant rise in South Africa shipped 3.6 million tonnes from Richards Bay Coal Terminal in May, a sharp fall from 4.8 million the previous month a drop which raises doubts about the country's ability to increase exports.

China took 330,000 tonnes from South Africa in May, down from 500,000 tonnes in April. China has mopped up a string of Indonesian low energy content, low-priced, sub-bituminous coal and discounted Australian cargoes as the country struggles to cope with acute power shortages.

But as yet, it is still unclear what measures the Chinese government will take to ease the power crunch or whether these will involve making coal imports more feasible. Currently, South African and Colombian coal are at the bottom of Chinese buyers' shopping lists for imports because the delivered costs are significantly higher than for Pacific region coal.

China may start buying South African coal again if imports of higher-grade material for blending rise so much that Australia cannot meet the need but this may not happen for months, if at all.

Indian buyers have largely halted spot purchases of South African coal, also preferring instead to take cheaper Indonesian and low-grade Australian cargoes.

(Sourced from Reuters)