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Saturday, 22 August 09
INDIAN COAL BUYERS RE-EMERGE WITH FRESH TENDERS


Reuters world's largest international multimedia news agency reported that,Indian coal end-users have re-emerged after a few weeks with several fresh tenders for Indonesian and South African coal for delivery from September, Indian traders said.

"They are all coming back to the market now. Coal prices have been very stable and buyers can see there's unlikely to be much volatility in the next few months, maybe $5.00-$10.00 maximum so they are keen to secure tonnage," said an Indian trader who is one of the country's largest importers.

India needs to import up to 70 million tonnes of coal in 2009 to bridge the gap between domestic output and demand. The bulk will be low-grade Indonesian material but up to 20 million tonnes will come from South Africa, and a smaller portion from Australia and Russia.

India's booming demand for South African coal for use in cement and sponge iron production has been by far the biggest price-supporting factor for FOB Richards Bay prices.

South African coal prices have hovered at around $60.00-$65.00 a tonne FOB Richards Bay for over two months.

Freight rates have risen sharply over the course of the year but Indian end-users are resigned to having to pay $80.00-$90.00 a tonne CIF for coal, traders said.

TENDERS ISSUED THIS WEEK

* Ultratech, one of India's largest cement makers, for 500,000 tonnes of South African coal for September-December delivery. Ultratech will negotiate final prices next week.

* State utility Kolkata Electric for 150,000 tonnes of Indonesian coal. This is a private tender issued to qualified participants run directly by the utility rather than state coal buyers such as MMTC or NTPC.

* Gujarat Narmada Valley Fertilizers Ltd (GNFC) is seeking 130,000 tonnes of coal with an extra optional 130,000 tonnes all for delivery in the balance of 2009.

* MMTC's tender in June for 12.5 million tonnes of coal will be re-issued any day now with fresh contract terms approved by the Ministry of Commerce. The 12.5 million tonnes is expected to be split among several suppliers with less onerous performance bond conditions than in the original tender.

Source: Reuters



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