* Dec S.African cargoes trade at $77.25, $77.85/T
* Hurricane Sandy causes minimal damage to U.S. coal ports
LONDON Oct 31 (Reuters) – Prompt South African coal prices
slipped by around 50 cents a tonne on Wednesday as weak demand
encouraged bearish sentiment, traders and utilities said.
Two December-loading South African cargoes traded today at
$77.25 and $77.85 a tonne FOB, down 50 cents from the previous
day’s bid level and over $1 lower than Tuesday’s offer level,
and there are still more potential sellers than buyers, traders
said.
“There’s still a lot of unsold coal out there, South African
is uncompetitively priced in just about every market, and the
Indians are buying very little, just enquiring,” one supplier
said.
South African producers, which have take-or-pay contracts to
move coal by rail to Richards Bay Coal Terminal, every year tend
to push exports through at maximum capacity until the end of
December.
Exports this year are expected to reach 70 million tonnes as
a result of efficiency improvements and capacity expansion by
state rail operator Transnet, but producers have limited exports
due to depressed international prices, the head of Transnet’s
freight rail unit said on Wednesday.
South Africa may export around 68 million tonnes this year
rather than the 73-75 million which Transnet could move to the
port of RBCT, Transnet’s Siyabonga Gama said.
The loss of 2 million tonnes of South African exports will
not make much of a dent in the market’s chronic oversupply,
which has weighed on prices all year because the main culprit
behind the glut has been U.S. exports.
Continued…
