Indonesian Thermal Coal Offers Dive to All Time Low

Indonesian imported thermal coal prices reached their lowest. Currently, 4200 GAR is being offered at USD 31/MT FoB Indonesia.

Offers for Indonesian grade coal, preferred mostly by Indian power plants, have fallen to the lowest level owing to sluggish demand, together with over supply in the global market. At present Indonesian 4200 GAR coal is being offered at USD 41/MT CFR East Coast ports for June’15 shipments. However, buyers are further negotiating with the sellers for shipments at even lower prices. As such, few traders have offered same grade material at the level of USD 39-40/MT CFR India.

An East Coast based trader highlighted, “Stock and sale Indonesian 3400-3600 GAR coal is being offered by traders at INR 2650-2700/MT at Vizag port; about 0.2 MnT of the material is available at the port.“The port is currently facing congestion period of about 3-4 days.

He also added that offers for the same grade Indonesian coal, ready to sale material, are assessed at INR 2750-2850/MT at Krishnapatnam Port. All duties and clearance included.

Few market participants also mentioned that continuous price gain in crude oil sustain, coal prices may strengthen in near future. Crude oil is currently at USD 63/barrel.

Indonesian Coal Production & Prices

Indonesian miners are under pressure of cutting their production, since constantly diving global coal prices have minimized their profit margin. As per Indonesian Energy and Mineral Resources Ministry, in Q1 of 2015 the country’s production has fallen by 21% to 97 MnT Y-o-Y. Out of 97, about 79 MnT was exported to different destinations and about 18 MnT was consumed by domestic market.

Quantity in MnT
Source: Indonesian Coal Mining Association (APBI)

Indonesian Coal to India

1. Currently about 2.2 MnT Indonesian grade coal is expected to arrive at different Indian ports till 30 May’15 (updated as on 18 May’15).
2. Indonesian coal vessels carrying about 1.8 MnT of the material are waiting at anchorage position. In May’15, about 6.3 MnT coal has been discharged at Indian ports. 

Indonesian Coal Imports & Prices to India

South African Coal

South African imported RB2 coal offers have risen in last few weeks and reached at the level of USD 63-64/MT CFR India fresh material offers are assessed at INR 4850/MT; and previously booked material is offered at INR 4700/MT at East Coast ports.