China’s Increasing Imports Continue To Push Indonesian Coal Prices Higher

Indonesian coal prices have continued its rising trend this week, on account of active buying from China.

Chinese coal buying had been boosted by the prevailing warmer temperature, in the midst of falling domestic coal stocks. Moreover, the absence of Hydro-power generation was also seen as a reason for rise in imported coal demand amongst the power producers.

Market participants have reported that Chinese buyers were procuring low CV Indonesian coal.

Indonesian 4200 GAR coal was offered at USD 44-45/MT, FOB Kalimantan. However, a higher bid by Chinese buyers on the back of limited supply was supporting the coal prices. Recently, a panamax vessel of this grade was last traded at USD 46/MT on FoB basis to China.

Offer for 3800 GAR coal were heard at USD 36/MT, FoB Kalimantan.

An uptrend was also seen in Indonesian high CV coal market, where 5000 GAR coal was traded at USD 63-64/MT, FoB Kalimantan, USD 1-2/MT higher than the previous week’s price.

Indonesian coal prices are expected to gain additional support from supply tightness, with the commencement of Ramadan when the coal production is normally hampered during the fasting month.

Indian Market Scenario:
Coal shortages continued to grapple Indian power utilities, as the available stock had fallen 2.61% W-o-W to 15.241 MnT as on 15 May’18, sufficient for 9 days of power generation which was 10 days, a week ago.

However, the no of plants facing critical stock levels have improved on the weekly basis, from 29 to 24.

Indian Buyers were willing to pay USD 43-44/MT on FoB Basis for 4200 GAR coal. While, there was also healthy demand for Indonesian high CV 5000 GAR coal, for which a trader at Vizag port had quoted stock and offer of INR 6100/MT (exclusive of GST and Compensation cess).