Seatrade Maritime is part of the Informa Markets Division of Informa PLC

This site is operated by a business or businesses owned by Informa PLC and all copyright resides with them. Informa PLC's registered office is 5 Howick Place, London SW1P 1WG. Registered in England and Wales. Number 8860726.

Freight rates turning India coal traders away from spot market

Freight rates turning India coal traders away from spot market

Mumbai: Indian coal traders, who account for most of the country's imports, have radically changed their trading patterns from spot buying to longer-term deals and arbitrage plays over the past several months with the assistance of Europe-based players, writes Reuters.

Indian traders attributed the change to record freight rates. "The delivered cost is most often what matters, more than the quality. So when Indonesian (coal) can be brought in much more cheaply, then that is what we will buy," one major Indian trader said on the sidelines of last week's Coaltrans Asia conference in Bali.

Bhatia, one of the biggest Indian coal importers, reportedly signed multi-year forward physical freight agreements between South Africa's Richards Bay and Indian ports at much cheaper rates than spot levels seen this year. This has managed Bhatia's freight risk and enabled it to sell some freight at a profit, Indian traders said. Coal producers are also said to be more comfortable about supplying term coal to India than before.

India's coal imports have grown rapidly during the past three years from a few million tonnes to a projected 50m tonnes for 2009, a large percentage of which has been coming from South Africa and the bulk of the remainder from Indonesia.  [12/06/08]