Indonesian coal prices retreated because supplies from several flood-stricken areas in South Kalimantan are recovering as the water receded, while main buyers China and India are slowing imports.
Coal with 4200 GAR heating value is offered at USD 48.50-49/MT, compared to USD 49-49.25/MT last week. But few offers were on the table as supplies are still limited, an Indian trader said.
“People expect shipments will be a bit delayed, but will be arriving on time,” said the Indian trader. As suppliers are yet to be able to fill up the full meet the full quantity, buyers have agreed to take small cargoes of 30,000 to 40,000 MT per shipment, he added.
An offer for Indonesian coal with a heating value of 3800 GAR for August shipment from South Kalimantan to the west coast of India was heard at around USD 39.75/MT.
Subdued demand from China and India, Indonesia’s main buyers, are also capping prices, an Indonesian trader at one of the top five producers in the country side.
“The markets, which normally absorb Indonesian coal is saturated now. India is slowing imports because of the monsoon season and prices are too expensive for them,” said the Indonesian trader. “China also has been seeing a good domestic production and its hydro power plants have been performing well so far, which is putting a lid on their imports,” he added.
The Indonesian trader confirmed that the wet weather has subsided in Kalimantan, enabling miners to recover shipments.
The Indian trader added that buyers now prefer to buy low-calorific value coal from East Kalimantan despite higher freight rate to India because East Kalimantan coal has a darker color and more stable than from South Kalimantan.
“For the Indian buyers, appearance is important. East Kalimantan coal has the luster of black and shiny,” which for buyers, it indicates the good quality coal, he said. Traders who want to import or are currently importing East Kalimantan coal, are doing it in stock-stock-and sale basis at Indian ports.
“They bring the vessels, stock the coal and sell it to the end users,” the Indian traders said.
Leave a Reply