Seasonal rain and high tides since past few days have caused widespread flooding across many parts of Indonesia and has also impacted country’s coal mining operations.
In fact, intense rains have also caused a landslide at a coal mine in Indonesia’s Sumatra island that have killed 11 miners today.
Amid the ongoing heavy downpour, country’s coal loading and discharging activities seems to have been affected as berthing of barges to vessels are facing difficulties, as informed by the trade sources.
Apart from this, thousands of labours (including those working in coal mines) are protesting against the Indonesian government’s unpopular Omnibus Law on Job Creation, which will further impact working conditions and the environment.
While any major impact of heavy rains and labour protest seems unlikely on the supply side as miners have sufficient stock with them, market participants have confirmed that due to increased moisture content, demand for Indonesian coal may suffer a bit.
Indonesian thermal coal reference price has dropped by an average of 23% since Jan’20 amid COVID-induced lockdown in majority countries and subsequent fall in energy demand.
Although country’s weekly index price picked up some pace from September end as China’s Jilin province released 5 mn t coal import quota for delivery from Oct-Dec’20, the heavy rainfall is less likely to provide any significant support to Indonesian thermal coal prices amid high stock and increased moisture.
Indonesian 4,200 kcal/kg GAR coal is currently being assessed at $30/t FoB Kalimantan, up from $23.5/t, a month earlier. While in case of India, the same is being assessed at $39/t, on CFR basis. The portside prices for 4200 GAR coal in India are currently being heard around INR 3,300-3,350/t at western ports.
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