*Chinese demand improves post-Lunar New Year holidays.
*Miners trying to liquidate cargoes due to approaching Ramadan.
Indonesian thermal coal prices have shown an upward trend in the past week. Low-CV (3400 GAR) coal prices were up by $0.33/t to $36.92/t, while high-CV (5800 GAR) coal prices rose by $0.89/t to $94.26/t.
On the supply side in Indonesia, production and supply were disrupted by rains. Sumatra and Kalimantan are still experiencing rain, causing delays in production in some mines. Additionally, rain has induced congestion at port, leading to a narrowing of delays in Indonesian shipments. Moreover, the availability of spot cargoes remained limited as most miners have already sold out for the current month.
Demand for Indonesian thermal coal from China has improved amid Chinese buyers following their return from the Lunar New Year holidays. Chinese domestic coal prices have increased, leading to a surge in inquiries for Indonesian thermal coal. The majority of Chinese purchases are focused on prompt-loading cargoes. While there are pockets of demand for first-half March-loading cargoes, demand is slightly weaker for end-March cargoes, and virtually non-existent for April loading cargoes. Few Indonesian miners are trying to liquidate cargoes because from mid-March to mid-April the producers will be intermittently present due to Ramadan.
On the Indian demand side, pockets of demand coming from the textiles and ceramics sectors for low-CV Indonesia coal, the demand from the power sector has been sustained by domestic supplies. Domestic production has continued to meet local demand effectively, with power plants reported to be operating with comfortable levels of coal stocks. India’s robust domestic production has consistently exerted pressure on imported coal price levels.
India: Portside prices increase by INR 100/t
Thermal coal prices for 4200 GAR coal at Kandla Port increased at INR 6,200/t. This uptick in prices is attributed to improved buying interest.
Outlook
Indonesian prices may see a rise in the coming weeks due to improved demand from Chinese buyers following their return from the Lunar New Year holidays. Additionally, demand from India for Indonesian coal is expected to rise from the second half of March once summer sets in completely. However, there may be some supply constraints from Indonesia due to rains.