A newly-built cement plant in Yemen is seeking 40,000-50,000t cargoes of South African coal for delivery into the port of Aden, a source close to the company said.
The cement plant is due to begin operations in September, the source said on the sidelines of a Coaltrans conference in Johannesburg.
South African coal producers and traders told Reuters on Thursday that September-loading coal cargoes are extremely scarce. They said they would want $61.50-$62.00 a tonne FOB for September cargoes.
Handymax freight rates to Aden were at least $44-45 a tonne, they said. Aden is an unusual route for coal and is a draught-restricted, slow discharge port. These factors can inflate a standard freight rate by several dollars, they said.
Delivered coal prices into Aden in handymaxes from South Africa are likely to be $100.00-$120.00/t CIF, producers and traders said.
Demand for imported coal into the Gulf states has been increasing this year because the construction boom there has spurred demand for cement and for coal to produce cement.
Cement producers in the United Arab Emirates, particularly in the Fujairah region, have been buying South African coal in handymaxes to feed their cement plants because gas is either unavailable or too expensive.
Coal is also being considered as a fuel for power generation in the Gulf. Saudi Arabia, Oman and the UAE are all studying the feasibility of coal-fired power plants to meet growing power needs and allow exports of higher-value gas to be maximised.