Indonesian thermal coal prices saw quite a variation this year due to the COVID-led change in energy demand globally. While the year started on a positive note, the coal prices started falling since Apr’20 and touched their lows in Sep’20.
However, post National Day holidays in China in first week of October, demand for Indonesian thermal coal picked up from China (its key importer) as Jilin province released 5 mn t of thermal coal import quotas, resulting which its prices got a boost and the rally is continuing since then.
The popular grade 4200 GAR thermal coal prices are currently being assessed at $29.9/t, FoB Kalimanthan basis. The freight between China and Indonesian also seems to have moved up recently due to the absence of vessels and are currently being hovering at $8-9/t. During Jan-Sep’20, Indonesia exported about 92.9 mn t of coal to China, about 30% of country’s total exports.
In case of India, buyers have already made bookings for Indonesian coal when prices started rallying in October and are not taking any keen interest in booking imports due to sufficient stock available at ports. As on 19 Nov’20, India’s thermal coal stock at Indian ports stood at 17.9 mn t, up by 1.8% w-o-w basis.
Last week, in a confirmed deal, 6500 NAR grade thermal coal was sold at $73.5/t, CFR Kandla basis whereas in another trade, 4200 GAR was booked at $30/t, FoB Kalimanthan basis. During Jan-Sep’19, Indonesia exported about 69.5 mn t of coal to India, about 22% of the country’s total coal exports.
We expect that Indonesian coal prices would remain more or less stable as Chinese import quotas usually get exhausted by the year-end. However, sources suggested to CoalMint that China’s Jiangsu province last week has allocated up to 3 mn t of import quotas to local end-users for the remainder of 2020, in order to reduce costs for utilities amid high Chinese domestic coal prices.
On the other hand, Guangdong province’s utilities and coal trading corporations are also lobbying for an additional 28 mn t thermal coal import quotas, in order to realize higher import volume in 2020.
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