It would appear that China was South Africa’s largest export market in February, followed closely by Pakistan, beating India into 3rd place as Indian buyers struggled with firmer freight rates.
Panamax rates have seen significant strength in both basins, whilst many Chinese buyers are immune to the freight market, either owning their own vessels or having long-term fixed rate capesize time charters.
It seems that Chinese buyers don’t have issues with SA coal’s trace elements after all, although the first cases of cargoes stuck in dispute with China’s CIQ agency have yet to be experienced. TFR has struggled with railings to RBCT since the start of 2021, with unavailability of locos, heavy rain and Covid related issues causing problems. Which probably all goes to explaining why physical RB1 is trading at a $3 premium to paper.
Japan’s J-Power has meanwhile started producing liquified hydrogen from Australian brown coal, as Australia pushes to become a major hydrogen exporting nation. CO2 released from the process is planned to be buried off the coast of Victoria. High coal and EU carbon prices are once again dampening European dark spreads after the recent surge of coal purchases, whilst warmer weather in SE Asia has seen Korean demand slow down too.
Eskom is apparently going ahead with a revised 10-year Duvha contract for around R600/ton, which is terrible timing for it considering coal prices are making recent highs. Locking in prices for 10 years is also an incredibly brave move, which will likely either result in hero or villain status in the future.