Indonesian coal prices at Indian ports fell again by INR 1000-1,500/tonne (t) as the government (Indonesia) lifted the export ban on the raw material, cooling down potential concerns of its lower supply.
Prices for 4200 GAR fell by INR 1,300/t to INR 8,300/t at Kandla Port, while that of 5000 GAR fell by INR 1,500/t to INR 10,000/t. Prices exclude cess and GST.
Trading activity at Indian ports, however, slowed down again as buyers crawled back to a wait-and-watch mode, focusing on procuring domestic supplies.
Indonesian coal stock with traders also remained limited, while vessel arrival is expected to remain slower as a total of 0.5 million tonnes (mn t) of Indonesian coal-laden vessels are slated to arrive at Indian ports between 12-17 Jan’22, CoalMint data showed.
Supply concerns in Indonesia ease
As the inventory crunch at Indonesia’s domestic power utility Perusahaan Listrik Negara (PLN) eased, the government partially lifted the export ban, allowing 14 vessels to depart.
As per industry reports, PLN has secured 13.9 mn t of coal last week and needs another 6.1 mn t to reach a minimum of 20 days’ inventory.
The government is likely to lift the ban in stages and would further discuss matters including the fulfillment of domestic market obligation (DMO).
Nevertheless, market participants continued to be worried regarding the pace of deliveries as over 120 vessels were still stranded at Indonesian waters, sources informed.
Currently, the government is re-evaluating ways in which the export resumption would affect the compliance of DMO as miners are required to sell 25% of their output to the local market at a maximum price of $70/t.
Short-term outlook
Indonesian coal prices are likely to remain elevated in the coming weeks as, despite the full withdrawal of the ban, coal exports from the country are likely to take some time in getting back to normalcy.
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