Portside prices of Indonesian coal remained largely unchanged this week as buyers adopted a wait-and-watch mode after imported prices rose by an average $5/t w-o-w rise last week.
Indonesian prices for 5000 GAR were at $111/t FOB, while 6500 GAR was assessed at $168/t.
Portside prices for the 4200 GAR were assessed at INR 9,500/t at Kandla Port, while those for the 5000 GAR were at INR 13,000/t. Prices exclude cess and GST.
Trading activity at Indian ports has slowed down with end-users delaying major procurements. With more Indonesian vessels coming in the upcoming weeks, end-users await easing of tight supply at ports.
Vessels carrying a total volume of 0.70 mnt of Indonesian coal are set to arrive at Indian ports between 8-18 Feb’22, reveals CoalMint’s vessel line-up data.
Manufacturing units across the western coast have been procuring coal in small parcels amid the non-viability of running operations at these higher raw material prices. Several screening plants around the Morbi region were also heard to have closed down or working under minimum capacity, informed market participants.
Few power producers were also heard seeking imported coal booking as thermal coal stocks with power plants were assessed at 25 mnt, sufficient for 12 days of consumption, as on 6 Feb’22, data from the Central Electricity Authority showed.
Power plants had largely kept away from making major coal import bookings last year amidst the sky-high prices of the same.
Indonesia’s tight supply prevails
Full-fledged shipments from Indonesia still continue to lag as miners fulfill old contracts and were heard offering $3-4/t premium over Mar’22 cargoes.
Indonesia’s coal production also registered a 25% m-o-m fall to 31.8 mnt in Jan’22 amid adverse weather conditions, as per data from the country’s Ministry of Energy and Mineral Resources (ESDM).
In a recent mandate, the government has announced a temporary halt to coal mining activity of companies that failed to submit their 2022 output plans, indicating that more regulations in exports are expected in the coming days.
The energy ministry is set to finalise its 2022 national coal output target after coal producers submit their work plans for approval. Based on preliminary discussions with coal mining companies, it expects producers to raise output to 637-664 mnt this year amid strong global demand.
The country’s coal output stood at 588 mnt in 2021, down 5% y-o-y, data from Indonesia’s Energy Ministry showed.
Short-term outlook
Portside Indonesian coal prices are likely to remain in a tight range in the coming week as the pace of supply from the country gradually recovers. Indonesian prices, on the other hand, are seen remaining elevated with the expectation of Chinese procurement picking up after the Lunar New Year holidays.
Leave a Reply