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Sunday, 13 December 09
CHINESE BUYERS SEEK LARGE TONNAGE OF SOUTH AFRICA STEAM COAL


Reuters reported that Chinese utilities on the coast and inland are seeking several cape cargoes each of South African coal for 2010 delivery because the delivered cost is USD 5 a tonne below their usual Australian supply.

South Africa exports have been curbed at around 60 million tonnes this year due to rail restrictions and are unlikely to be much higher next year. India has taken one-third of South Africa coal this year but Indian buyers may have to scramble for Q1 cargoes if the current Chinese enquiries turn into sales.

One trader who sells to Chinese power plants said "They're all asking for it, several capes each, it's all to do with the FOB spread between Australia and South Africa, but it remains to be seen if they'll pay the market price."

A South African coal producer said "The big power companies in China can see that the delivered South African price is lower than Australian and they want to take advantage of that."

China has become a key market for coal producers around the world in 2009. Australia and Indonesia supplied the bulk of imports but utilities have also bought Russian and a small quantity of South African to see if they could use it.
Source: Reuters / Steel Guru



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