Indonesian coal prices have softened again amid low demand from China, as deals emerged at lower prices than those concluded a week ago.
August and September are generally low coal consumption period in China, where demand is likely to pick up in around October for winter restocking. Besides, demand from the buyers has also been hampered by the delay in disclosing the quota for maintaining coal stocks at the power plants.
Market participants have informed that the Chinese government is yet to specify the level of imported coal stock to be maintained at the power plants, which have left the power companies at bay. Moreover, some of the power plants have already met their scheduled coal stock, and are waiting for government’s call to resume their purchasing.
Indonesian low CV coal prices loses further ground this week, which are presumably brought by Chinese buyers to blend with its domestic coal.
4200 GAR coal price was assessed at USD 38/MT, FoB Kalimantan. 3800 GAR coal was priced at USD 31/MT on FoB basis this week.
Chinese demand for high CV coal also remain subdued as bids from the buyers were in a wide range of USD 57-62/MT on FoB basis for Australian 5500 NAR coal, against offers at USD 64-65/MT this week.
Indonesian 5800 GAR coal price, equivalent to 5500 NAR, was assessed USD 8 lower than its Australian counterpart at USD 73/MT this week.
Indian Market Scenario:
The free fall in Indonesian coal prices has hindered fresh deals from the Indian buyers as they are waiting for prices to stabilize.
Coal end-users are said to be active in the Indonesian coal market, while others are not in a hurry to book their cargoes.
An Indian trader has commented that there is definitely demand in India, but they just don’t want to buy. He added that nobody would like to make loss in booking a cargo now, when prices are declining continuously.
Indonesian 5000 GAR coal price had again fallen near about USD 2/MT this week, and was assessed at USD 55-56/MT on FoB basis.
For coal user, as for now they have many cargoes coming to Indian shore, but to cover up for their demand in Oct’18, they are likely to return in Sep’18.
Recently, state run-Mahagenco has also floated a tender for supply of 2 MnT imported coal at its plant location in Maharashtra. The company’s previous tender of 1 MnT in Jan’18 has been put on hold, as informed by market sources. However, amid the deteriorating coal stock at the plants, the power producer has come up with a new tender to secure fuel security for its plants’ operation.
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