* Aug S.African cargo trades at flat to API4 index
* Chinese ports congested after H1 buying spree
LONDON, June 15 (Reuters) – South African FOB prices were
30-75 cents a tonne higher on Friday afternoon, a minimal move
upwards, but all FOB coal prices remained under pressure from
oversupply and weak spot demand.
“Prices moved very slightly higher in early trading, with
power, gas and a fall in the euro but overall it’s still looking
weak,” one European trader said.
A July loading South African cargo was bid at $81.00 on
Friday, up 75 cents from Thursday’s bid level and following two
August trades on Thursday at $81.65.
Very few South African cargoes have been sold into Europe in
the past week and more players are looking for freight from
Richards Bay to ARA but this is being driven more by a choice of
European over Chinese counterparty risk than anything else.
The gap between FOB and DES prices is still too narrow to
reflect the actual, minimal, freight cost of around $5.00 a
tonne on a capesize vessel so the seller’s profit margin would
be less with a European sale but the risk is also perceived as
less and the deal more worthwhile, suppliers said.
They said it was better to be paid less than not at all.
“South African still doesn’t quite work into Europe and some
is being done but probably not for long,” one trader said.
Continued…
