Indonesia coal prices extend gains this week as buyers, including China, are returning to the market and tight supply, according to two traders.
Indonesia’s power-station coal with heating value of 4200 GAR is offered at USD 43-44/MT, FOB Kalimantan. Some cargoes traded at around USD 42/MT. Trades for 4200 GAR were also heard at USD 43-43.50 for delivery in Supramax vessel, said a trader in Mumbai. Prices were up from USD 39-40 level at end of April.
“We start seeing some inquiries for cargoes from China’s state-owned companies, not from traders,” said a trader in Jakarta. “We also receive inquiries from Vietnam but their asking prices isn’t as good as other buyers. Vietnamese buyers usually ask for prices at either on par with the indexes or just below the index,” said the Jakarta trader.
Limited spot cargoes for 4200 GAR has also supported prices with traders scrambling to find cargoes for immediate shipment.
“There are currently very little 4200 GAR available through spot. Most cargoes have been sold,” said the Mumbai trader. “On the demand side, 4200 GAR requirement is huge. There aren’t enough cargoes.”
Despite tight supply and a healthy demand, prices may not gain much in coming weeks as uncertainty on China’s demand has kept traders on their toes.
“One day, China could ban coal shipments in some ports. And then, you wake up the next morning to find China does something else.” said the Jakarta trader. “So prices are likely to extend gain but we won’t see USD 3-4 increase. It will be modest gain of around USD 1.”
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