Cookies on the ICIS website


Our website uses cookies, which are small text files that are widely used in order to make websites work more effectively. To continue using our website and consent to the use of cookies, click away from this box or click 'Close'

Find out about our cookies and how to change them

South African prices rise as Richards Bay power outage continues

06 Feb 2014 13:38:55 | csd


Power supply to South Africa’s Richards Bay Coal Terminal (RBCT) is expected to be restored by 18:00 local time on Friday (16:00 London time), with operations expected to return to full capacity around 24 hours later, on Saturday evening, an RBCT spokesman said.

The export terminal, with an annual export capacity of 91m tonnes, had to suspend all operations last Friday after a power failure on the two cables supplying electricity to the terminal. RBCT initially expected power to one cable would be restored by Wednesday, with the second one following on Thursday. This delay had an immediate effect on physical coal prices on Thursday, with FOB RB spot cargoes trading at $81.75/tonne on Thursday, up $1.50/tonne day on day.

The week-long outage has caused a large backlog to operations, which will take several weeks to clear, the spokesman confirmed. On Thursday, five ships were alongside, ready to load, with another 23 sitting at anchorage.

RBCT typically shifts 200,000 tonnes of coal a day, which means the week-long outage would cause a 1.4m tonne gap in exports. Although one coal market source assessed this backlog as relatively small, a second trader said it would still come at a considerable cost as sellers will have to pay fines if they are late delivering the coal.

The second trader added that one source was considering trying to claim force majeure because his tonnes have not arrived at the terminal yet. If he was successful he could avoid a penalty for being in breach of contract if he is late delivering the tonnes. “If he issues a force majeure he can get out of contract without paying the cost. It is unlikely he would succeed, though, as the situation is not serious enough,” the source added. Manca Vitorino

Other Options