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Thursday, 14 January 10
INDIANS RESUME S. AFRICA COAL BUYING AGAINST INDEX - REUTERS


Indian trade buyers have resumed buying of South African prompt coal cargoes after a two-month hiatus but are opting for index-linked pricing, hoping that prices will fall before payment is due, traders said.

India accounted for over 30 percent of South Africa's 60 million tonnes of steam coal exports in 2009 and this proportion is set to rise steadily as more end-users switch to South African material for its consistent quality.

"The Indians have been fairly active, buying mostly index-linked at 75 U.S. cents or thereabouts over the API4 index and all for Q1 loading," one broker said. South African coal prices surged to $94 a tonne FOB Richards Bay in the first week of January from $75 in late December but fell back this week to $82/T.

"Nobody in India is going to be buying fixed-price coal in this market from South Africa. The prices are moving too much and it is too much risk," one Indian trader said.
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