Supply Tightness with Rise in Chinese Demand Supporting Indonesian Coal Prices

Indonesian coal offers are firmed this week driven by Chinese buying appetite along with domestic climate issues.

Indonesian Steam coal offers rose slightly this week by about USD 1-1.5/MT owing to supply tightness coupled with increased sea freight rates these days. At present, the country has been struggling with unseasonal heavy rainfall, which resulted in lack of material availability. Also, rise in Chinese buying is driving the market to bullish level.

However, Kalimantan (Indonesia) FoB offers are more or less alike at previous level for all the grades.

A West Coast based trader commented, “Indian traders have done with their monsoon restocking, now buying activities have slowed down in India, which may influence Indonesian coal market further. Contrastingly, China seems to be more active for low CV coal imports”.

He also added that they are offering Indonesian 4200 GAR and 3800 GAR coal at USD 33-33.5/MT and USD 26.5-27/MT, CFR Kandla Port for May’16 end and Jun’16 loadings respectively. Meanwhile, high CV Indonesian 5000 GAR and 5500 GAR is being offered at USD 46/MT and USD 48-49/MT, CFR Kandla Port.

Stock and sell offers at ports

1. A Supramax vessel of 3800 GAR is expected to reach at Kandla next week; will be offered at around INR 2,550-2,600/MT on stock and sell basis (all duties and clearance included, VAT & CST will be added further). About 20,000 MT of high CV 5000 GAR coal is offered at INR 3,000/MT at the same port.
2. Indonesian 4200 GAR is available at INR 3,800/MT, loaded on truck at Kandla Port by a trader.
3. At Hazira port, Indonesian 4200 GAR is traded at INR 3,000/MT loaded on truck basis.