Portside prices of Indonesian thermal coal continued to remain under pressure this week, mirroring the trend in imported coal rates and also because of the ongoing weak buying appetite in the domestic market.
Rising Russian shipments into the Chinese market and weak domestic coal prices have weighed on buyers’ overseas bookings in this country, keeping Indonesian prices in a tight range for over a month now.
Back home, coal-consuming units continue to avoid making bulk purchases ahead of the monsoon as capacity utilisation remains lower at 50-60%, market participants informed.
Apart from the power sector, the non-power sector using Indonesian coal has largely been on the sidelines ever since global prices surged.
“Buyers are not willing to take bulk bookings amid expectation of a further fall in prices going ahead, while higher stock accumulation at ports are already adding pressure to upcoming bookings,” a western-India based trader said.
Bookings of low-CV Indonesian coal in the range of 3400-3800 kcal/kg GAR have also come under pressure as the biggest user base in the Morbi region is set to temporarily close down operations for a month starting mid-August.
Portside prices
*Price in INR/t. Exclude cess and GST.
India’s power demand
With the onset of the monsoon season in the country, peak power demand has also subsided. India’s power demand had jumped by a record 40,000-45,000 MW per day last month as an intense heat wave swept through northern parts of the country.
Power plants, however, continue to maintain stockpiles to avert any crisis-like situation going ahead.
Coal stock at Indian power plants stood at 27 mnt (as on 4 July, sufficient for 12 days, data from the Central Electricity Authority revealed.
Vessel arrival at Indian ports
As per CoalMint’s vessel line-up data, a total of 1.3 mnt of Indonesian coal is set to arrive at Indian ports between 5-25 July with Adani Enterprise as the highest receiver.
*Qty in mnt
Short-term outlook
Expectation of a further fall in imported Indonesian coal prices is likely to keep portside prices under pressure in the upcoming week. Imported coal booking are likely to remain firm in India as power utilities rebuild stockpile.
To know more about Indonesia’s coal demand in India and its changing trade dynamics in the domestic market join us at India Coal Outlook Conference. CoalMint will be hosting the India Coal Outlook Conference on 3-4 August 2022 at The Lalit, New Delhi, to discuss the key issues pertaining to domestic coal production and supply, the government’s objective of controlling imports and domestic supply gap affecting many industries, the need to increase the purchasing power of Indian steel companies in the volatile global coking coal market as well as issues related to decarbonization of the coal value chain.
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