S.Africa April coal exports to India fall: exporters

Mon May 9, 2011 11:42am GMT

LONDON (Reuters) - South Africa exported 1.2 million tonnes of thermal coal to India in April, a fall from 1.5 million shipped in March, exporter sources said.

India since 2005 has become a key market for South African coal and an important price-driver for FOB Richards Bay coal prices, because India's coal imports have surged to meet demand that its domestic coal industry cannot supply.

India has a structural need for increasing tonnages of imported coal but buyers shift quickly between coal origins depending on which has a lower delivered cost.

"We have reduced our South African buying and have not signed term contracts for several months. It's just too expensive and not competitive against cheaper Indonesian coal," one of India's biggest trade importers said.

India took 25 percent of South Africa's 4.8 million tonnes of total coal exports in April, the sources said.

Asian demand for South African coal also from China, South Korea, Taiwan and Malaysia has more than compensated for a fall in European buying due to oversupply.

China imported 500,000 tonnes of South African coal in April, a slight rise from 450,000 tonnes in March.

The percentage of Indian imports of South African coal has dropped markedly since January, having averaged 30 percent per month throughout 2010.

India took 28 percent of total exports of 5.6 million in March and 19 percent in February, compared with 34 percent in January. (sourced Thomson Reuters)