South African coal exporters have been forced to increase discounts to India in the face of increasing competition from Colombia.
According to a statement released by S&P Global Platts yesterday, there’s been a continuous rise in prices of South African coal over the past several weeks while Colombian sellers are looking to push more volumes to Asia.
The price for Richards Bay coal was assessed by Platts at US$78.5 per metric tonne on Monday this week, up by US$4.95 over the last two weeks, while the equivalent Colombian coal was assessed at US$71.5 per metric tonne.
However, Platts spokesperson Joseph Clarke added noted that tight supply would likely keep a lower limit on the discount rate that South African coal sellers could offer.
“Although the possibility of Colombian coal completely displacing South African is highly unlikely, it could become a strong competitor for marginal spot cargoes, particularly while Indian demand is weaker than in previous years,” he added.
