- Marginal rise seen in prices at Navalakhi Port
- Indian power plants stocked up ahead of monsoon
Portside trade activities in Indonesian thermal coal in India continued to remain subdued this week. Prices of the 3400 GAR coal at Navlakhi Port edged up slightly to INR 5,200/tonne (t), while the 4200 GAR at Kandla Port was priced at INR 6,300/t, both stable w-o-w. Also, prices at Vizag Port remained unchanged w-o-w.
Indian coastal power plants had stocked up on coal before the advent of the monsoon. Demand remained on the lower side also because of sufficient domestic production. Coal stocks at Indian power plants were heard to be sufficiently available. Additionally, industrial demand has declined due to the monsoon halting infrastructure projects. Demand for seaborne cargoes from India stayed low as logistics for domestic coal supply improved, facilitating efficient transport of coal from mines to power plants across the country.
Prices of the high-CV (5800 GAR) coal were recorded at $93.69/t, down by $0.97/t. Indonesian mid-CV coal prices (4200 GAR) decreased by $0.69/t to $53.58/t. Meanwhile, prices of the low-CV (3400 GAR) coal decreased by $0.46/t to $33.57/t. Prices are on FOB basis.
Asian thermal coal market turns slow
Bearish sentiment continued to dominate the Asian thermal coal market, maintaining prices within a narrow range.
Despite this, heavy rainfall in several Indonesian provinces continued to hamper production. Heavy rainfall led to flooding in mines and some hauling roads in South Kalimantan, causing supply tightness from the region. In contrast, major production areas like East Kalimantan were not significantly affected by the rain and continued operating at normal capacity. Additionally, weak demand in the spot market kept prices stable, effectively counterbalancing the supply constraints. However, going forward, it was heard, miners planned to lower their output levels on oversupply, high mining costs, and rains.
Chinese buying continued to remain weak on bid-offer disparities. The Chinese floated multiple tenders during the week. However, these failed to conclude because of lower bids from the buyers. Besides, high port stocks at China restricted buying interest. Another reason was the higher hydro-power output in China which weighed on seaborne coal demand and consequently traders struggled to liquidate their cargoes.
Outlook
Indonesian thermal coal prices are expected to remain on the lower side on low demand from major Asian countries due to high stocks and sufficient domestic production. However, the Indonesian miners were heard planning to reduce their output target to combat the extensive supplies and subdued demand.
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