China reselling SA coal into Europe

At least four capesize cargoes of South African coal have been sold back to the original sellers by Chinese buyers during the past month and all are coming to Europe, said sources familiar with the deals.

The South African coal is being stockpiled in Amsterdam-Rotterdam-Antwerp and at power plants either for sale into Europe or to be burned at the main buyer’s own power plants.

This comes at a time when Australian coal is for the first time in years being offered into the European market and will increase the downward pressure on DES ARA prices, which have been resilient at $125 to $130 a ton this year, traders and utilities said.

“We’ve been buying South African coal at prices equivalent to flat to the API2 index,” said one source who has bought back South African cargoes intended for China.

“We haven’t bought back any South African [coal] from China ourselves because we’ve only done spot deals there but I am aware that this reselling is going on and it is coming to Europe,” another Europe-based trader active in the Asian market said.


Headed for Europe
It comes as no surprise to the coal market that China is reselling coal previously bought as term deals, but what is interesting now is that this coal is headed for Europe rather than being absorbed in Asia, the sources said.

Chinese coal prices have been below international levels for several months, making domestic coal the preferred option and prompting reselling.

China’s state planning agency earlier this month called on regions and enterprises to adopt effective measures to keep coal prices stable.

A large trading utility last year signed a multi-year deal with several Chinese utilities and buying agents to supply a mix of mostly South African and some other origins to China.

A few other traders followed suit with smaller scale term deals, and it is these term deals which are being unwound, the sources said.

“There’s more South African and who knows what else being re-sold by the Chinese on an FOB basis. We don’t know where that’s going once it’s loaded at Richards Bay if we haven’t bought it,” another utility source said. — Reuters

Subscribe to the M&G

These are unprecedented times, and the role of media to tell and record the story of South Africa as it develops is more important than ever.

The Mail & Guardian is a proud news publisher with roots stretching back 35 years, and we’ve survived right from day one thanks to the support of readers who value fiercely independent journalism that is beholden to no-one. To help us continue for another 35 future years with the same proud values, please consider taking out a subscription.

Related stories

South Africa must revisit and refresh its idea of itself

Covid has propelled citizens into feelings of a new shared identity in which the historical force of ‘whiteness’ is fading into irrelevance

Muddying the waters in the Musina Makhado economic zone

The public participation process on the environmental impact assessment for the area’s special economic zone has been shambolic

Institutions of higher learning should commemorate their casualties

The bust of Matikweni Nkuna at Tshwane University of Technology is an example of how we should honour those who fought for equal access to education

Seals abort pups in mass die-off

There are a number of factors — a pollutant, virus or bacteria or malnutrition — that may have caused the 12 000 deaths on Namibia’s coast.

How US foreign policy under Donald Trump has affected Africa

Lesotho has been used as a microcosm in this article to reflect how the foreign policy has affected Africa

Deconstructing South Africa’s construction industry performance

The construction industry has contracted sharply, partly due to Covid, and needs to rebalance its focus if it wants to survive
Advertising

Subscribers only

The shame of 40 000 missing education certificates

Graduates are being left in the lurch by a higher education department that is simply unable to deliver the crucial certificates proving their qualifications - in some cases dating back to 1992

The living nightmare of environmental activists who protest mine expansion

Last week Fikile Ntshangase was gunned down as activists fight mining company Tendele’s expansions. Community members tell the M&G about the ‘kill lists’ and the dread they live with every day

More top stories

Fifteen witnesses for vice-chancellor probe

Sefako Makgatho University vice-chancellor Professor Peter Mbati had interdicted parliament last month from continuing with the inquiry

Constitutional Court ruling on restructuring dispute is good for employers

A judgment from the apex court empowers employers to change their workers’ contracts — without consultation

Audi Q8: Perfectly cool

The Audi Q8 is designed to be the king in the elite SUV class. But is it a victim of its own success?

KZN officials cash in on ‘danger pay for Covid-19’

Leadership failures at Umdoni local municipality in KwaZulu-Natal have caused a ‘very unhappy’ ANC PEC to fire the mayor and chief whip
Advertising

press releases

Loading latest Press Releases…

The best local and international journalism

handpicked and in your inbox every weekday