S Africa train derailment disruption to be brief

Market participants expect the disruption caused by a derailed train on South Africa's coal export line to ease by the start of next week.

Rail operator Transnet Freight Rail (TFR) should be able to get rail deliveries back up and running a day or two, two participants said.

A notice issued by TFR this morning said the train derailed with 44 wagons and the machinery required to resume clearance is on its way to the site of the incident.

"The [estimated] time of resumption has not been confirmed yet," the notice reads, adding that some repair work planned for 3 May will now be carried out simultaneously with the repair work at the derailment site.

South African coal prices have rallied following the derailment of the loaded train between the coal fields and Ermelo near Hammelfontein. The accident occurred at about 14:00 local time (12:00 GMT) yesterday.

In the paper market, the API 4 May swap traded today at $92/t at 11:00 GMT, up from yesterday's settlement of $89.80/t and Tuesday's (27 April) close of $86.85/t. In the physical market, a 50,000t May cargo traded on screen at $98/t early this afternoon.

"Both lines [comprising the key route for transporting coal to Richards Bay Coal Terminal] have been temporarily closed until further notice. Investigations to determine the root cause of the derailment will commence shortly," TFR confirmed yesterday.

By Alex Thackrah