Indonesian Coal Supply Under Pressure

Heavy rain around Indonesia along with limited offers for Oct’16 loadings kept Indonesian supply tight. Whereas, offers are still hovering upside.

There is not much volatility seen in the Indonesian coal market within a week and offers are still hovering upside along with supply tightness. Although, heavy rain and rising demand from China keeps supply tightness for near bookings. At present, 4200 GAR coal is offered at USD 35/MT, FoB for Oct/16 loadings on limited cargo availability.

Meanwhile, Indonesian Coal offers are continue to rally on the grounds of strong Chinese demand. Offers have already hit 18-months high since Mar’15.

In context to India, although market is gradually picking up but buyers are not accepting current level of prices to procure material for Oct-Nov’16 cargo. Moreover, buyers are yet to find better deal for Oct-Nov cargoes as they are struggling to match with recent price rise.

In India, CFR offers for 4,200 GAR are heard at USD 41-42/MT at West Coast ports for Sep’16 loadings. Low CV Indonesian 3,800 GAR is offering at USD 33-34/MT, CFR. While 5,000 GAR is being available at USD 58-59/MT, CFR. High CV material of 5800 GAR is offering at USD 67/MT, CFR East Coast.

Mentioned by an Indian trader, “Supply tightness and growing Chinese demand kept market higher, on the other side Chinese bids are stronger than Indian’s which attracted Indonesian miners and traders more  and willing to sell their material in China.”

Stock and Sale Offers at Ports
• Indonesian 4,200 GAR coal is offered at INR 3,500-3,600 stock and sale at Kandla port (all duties and clearance included, VAT & CST will be added further).

• 25,000 MT of 4400 GAR blended material is being available at INR 3,300/MT at Paradip port. While, 5000 GAR and 5800 GAR is offered at INR 4,600/MT and 5,230/MT at Vizag Port respectively (taxes will be added further).