Rise in South African coal export prices to run out of steam as rivals shift Australian supply to China

Richards Bay Coal Terminal

THE The unexpected surge in international thermal coal prices to levels as high as $ 80 / t that took place in November on Richards Bay exports is unlikely to last and a more sustainable price range would be between $ 60 / t and $ 70 / t.

This is according to the group director of Exxaro Resources: Marketing and Logistics, Sakkie Swanepoel, who commented today that price levels above $ 70 / t are likely to attract more coal supplies to the market.

Speaking on a teleconference following the release of Exxaro CFO Riaan Koppeschaar’s pre-closing statement on the group’s expected performance for the year to end-December, Swanepoel said prices above $ 70 / t was likely to stimulate additional supply from Indonesia in particular.

Exxaro Minerals chief executive Nombasa Tsengwa added that the wild card in the situation was what the Chinese might do in the wake of the diplomatic row between China and Australia that was affecting Australian coal exports to China. .

“What are the Chinese going to do? Will they take charcoal from familiar actors or will they – in the long run – take it from Colombia? There is a lot of uncertainty there, ”she commented.

Swanepoel said Chinese restrictions on imports of Australian coal had led Australians to “enter our markets much more aggressively” when there had also been more competition in Indian and Middle Eastern markets. from Colombian and Russian suppliers.

Asked about the prospects for an increase in South African exports to China to take advantage of reductions in Australian supply, Swanepoel replied that besides the economics involved, there was a quality issue given the strict limitations of China on trace elements in coal, especially fluorine.

“Generally, South African coal does not fall within the limits that China has imposed on five critical trace elements in the coal it will import.

“Most South African coal producers are currently analyzing samples from different mines to determine if their coal will be acceptable for the Chinese market.

“I only know of two ships from South Africa that have sold to China, so there’s a lot of noise in the media and the market and a lot of talk, but not so much coal actually going there.

“We get a lot of inquiries from China regarding the availability of coal, so we are reviewing it, but I would expect Colombian and Russian coal as well as Indonesian to find it easier to get in.”

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