- INR 400/t cess removal drives stock sell-off
- Rupee depreciation, weak demand cap recovery
The Indian portside market for Indonesian thermal coal witnessed a price correction during the week ending 12 September 2025. BigMint’s assessments showed that the 5000 GAR grade declined by INR 150/t to INR 6,950/t at Kandla and INR 6,850/t at Vizag.
The 4200 GAR grade eased by INR 50/t to INR 5,650/t at Kandla and INR 5,550/t at Vizag, while the 3400 GAR grade slipped by INR 200/t to INR 4,200/t at Navlakhi.
Importers delay shipments ahead of cess removal
Market participants indicated that with the cess on coal scheduled to be removed from 22 September, importers are holding back on fresh vessel bookings. Traders are rushing to liquidate existing stock, as new cargoes arriving post-cess are expected to be cheaper by about INR 400/t. This accelerated selling pressure has contributed to the week-on-week decline in prices. Industry discussions around a potential refund of previously paid cess are ongoing, though the outcome remains uncertain.
Rupee depreciation exacerbates cost pressures
Adding to challenges, the Indian rupee depreciated sharply, hitting an all-time low of INR 88.29/USD. This has magnified landed cost pressures for importers, reducing the overall competitiveness of imported coal at a time when market demand is subdued.
Freight market softens amid weak trading activity
Supramax freight rates on the Indonesia (East Kalimantan) to India (Navlakhi) route fell by $1.79/t week-on-week to $15.96/dmt. According to sources, Asia-Pacific Supramax freights weakened due to a slow start to the trading week, coupled with limited activity and scarce cargo availability in the Indonesian basin.
Portside inventories decline on muted arrivals
India’s portside thermal coal inventories dropped by 7.1% week-on-week to 12.1 mnt in week 36, compared with 13.03 mnt in week 35. Arrivals remained muted as elevated import offers and freight costs inflated landed prices, while weak domestic demand from traders and steelmakers continued to dampen fresh bookings.
Global market diverges with modest gains
In contrast to India’s weakness, international Indonesian coal prices posted small gains. The 5800 GAR grade inched up by $0.13/t to $75.44/t, the 4200 GAR grade rose by $0.62/t to $41.90/t, and the 3400 GAR grade increased by $0.09/t to $30.19/t.
Market outlook
In the near term, Indian portside coal prices are likely to remain under pressure until cess removal on 22 September, after which import economics may improve, supporting fresh bookings. However, rupee weakness and subdued steel sector demand could cap any rebound, with recovery hinging on post-cess restocking, freight stability, and demand revival.
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