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Wednesday, 18 November 09
AMBUJA COAL TENDER PRICES EQUATE TO $61.50/T FOB


Reuters reported that, coal prices achieved by Indian cement maker Gujarat Ambuja in its early November tender equate to $61.50 a tonne FOB Richards Bay, several dollars below the prevailing API4 physical index, Indian traders said.

Traders supplying coal on a delivered basis to Indian end-users at fixed prices have been squeezed by the recent rise in South African Richards Bay coal prices which is forcing them to supply at a significant loss.

"Around half a million tonnes of cargo has been traded at least index minus $8.50 approximately," one Indian coal trader said.

Traders have been buying South African coal at floating prices based on the API4 index to meet commitments made at fixed prices.

Indian cement makers such as Ambuja tend to prefer South African coal to lower quality, cheaper Indonesian material.

The rise in API4 to 12-month highs has left some facing losses of up to $10.00 a tonne.

Most of the Indian traders who will import nearly 20 million tonnes of South African coal in 2009 have not hedged their coal or their freight.

Gujarat Ambuja bought around 500,000 tonnes of South African coal in the first week of November at prices of $82.00-$84.50 a tonne CIF India, Indian traders said.

Ambuja bought two December handymax cargoes at $83.00 a tonne CIF West Coast India, three cargoes for January-April at $84.50 a tonne CIF West Coast, three cargoes for April-May delivery at $84.50 a tonne CIF West Coast and two May cargoes at $82.00 a tonne CIF East Coast, they said.

The suppliers were three Indian coal trading companies.

At prices of $84.50 a tonne CIF, given prevailing freight from Richards Bay to India at the time of the deals, these prices net back to $61.50 a tonne FOB Richards Bay, traders said.

During the week of the deals, the API4 physical index of prompt Richards Bay prices was $66.64 a tonne, several dollars higher than the net back prices, they said.
Source: Reuters



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