Indonesia thermal coal portside prices have been largely stable since last month. Portside prices of 5000 GAR coal ex-Kandla is assessed at INR 10,100-10,200/t, while 4200 GAR coal (ex-Kandla) is assessed at INR 8,400-8,500/t.
Thermal coal demand remains largely muted. Indian consumers are holding off purchases since indigenous coal is cheaper than imported coal, according to sources.
“Indian cement companies are using more of pet coke while textile and chemical units are maintaining needs-based inventories, instead of stocking up in bulk which is why even during peak demand season, Indonesian coal demand is not picking up,” said a Gujarat-based trader.
What’s happening in China?
China’s domestic thermal coal prices have touched RMB 1,200/t and further price drops seem unlikely. Many inquiries were heard post New Year holidays which are likely to keep prices stable.
Demand has emerged from the non-power sector also and buyers are hunting for the last round of purchases before the Chinese New Year holidays in the last week of January.
However, in case of imports, Indonesian thermal coal prices witnessed a significant decline after traders returned from the holidays, pressured by a price fall in tender results of Chinese utilities.
Indonesia HBA index price rises
Indonesia’s benchmark coal price for January 2023 rose by $24/t (8% m-o-m) to $305/t. The increase in prices came amid heavy rainfall in key coal exporting country, Australia, that would disrupt coal supplies and hamper transportation.
“The current spike in Australian coal prices is due to high rainfall which has hampered coal transportation,” Indonesian ministry spokesperson Agung Pribadi said, adding that “there were problems at the loading port which caused problems with Australia’s coal supply to importing countries, such as Japan and South Korea”.
Outlook
The rise in the HBA index price coupled with anticipated supply disruption in Australia may push Indonesian thermal coal portside prices higher. However, not-so-positive demand sentiments in the Indian market may restrict any significant rise in prices.
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