- Indonesian low-rank coal remains firm on strong SE Asian demand, tight supply
- Australian high-CV coal sentiment cautious as rising prices face buyer resistance
Asian thermal coal markets entered April with diverging trends. Indonesian low-rank coal extended its recovery with trades climbing to $64/t FOB, while Australian high-CV coal pushed higher to $144/t FOB but traded at a discount to indexes. Chinese domestic prices plateaued after a three-week rally, and demand shifted toward Southeast Asia and South Korea as China and India stayed largely on the sidelines.
Indonesian low-rank remains standout performer
Indonesian 4,200 GAR (3,800 NAR) emerged as the strongest segment. Trade levels advanced from unconfirmed $58-59/t in early March to confirmed trades at $62/t, $63/t, and $64/t FOB in the week ending 2 April.
Southeast Asian demand drove the strength. Vietnam actively inquired for 3,800-4,200 GAR cargoes, while the Philippines pursued substantial volumes. South Korea, Vietnam and Bangladesh sought mid- to high-CV coal and paid sharp premiums amid tight availability.
Index-linked trades confirmed seller confidence, consistently commanding premiums of $2-4/t above index throughout March. A trade on 2 April was executed at index plus $3/t for 3,800 GAR May loading.
Supply constraints supported the uptrend. The annual production quota stands at 580 million tonnes (mnt), and miners focused on domestic obligations rather than spot exports.
Forward curves show April 2026 at $58.87/t, May at $59.21/t, and June at $59.30/t — a backwardated structure suggesting near-term tightness.
Australian high-CV rises but buyers show resistance
Newcastle 6,000 NAR coal staged a clear uptrend. Trade levels rose from $133.50-135/t (week ending 27 March) to $144/t (week ending 2 April). Bid/offer spreads tightened from over $10/t in mid-March to just $1-3/t by early April.
However, a critical nuance emerged. Index-linked activity shifted from offers at premiums to trades at discounts. On 2 April, a trade was executed at index minus $5.50/t for June loading — indicating that sellers are accepting discounts to secure business and buyers are resisting prices. Wide July offers at $164/t against bids of only $142/t reinforce this caution.
Australian 5,500 NAR saw thinner activity but stability, with a bid at $89/t for April Panamax.
Chinese price rally pauses
Chinese domestic Qinhuangdao (QHD) prices rallied strongly from 13-27 March but flattened by 2 April. The 5,000 NAR grade dipped slightly from $98.45/t to $97.97/t, while 5,500-6,000 NAR held steady.
Freights provided the clearest cooling signal. QHD to Shanghai freights fell 12.8% from $5.79/t to $5.05/t, and QHD to Guangzhou eased from $8.65/t to $8.40/t — indicating reduced urgency to move domestic coal south.
The tender market for Indonesian coal strengthened before pausing. Benchmark 3,800 NAR saw its trading range tighten from an RMB 46/t spread (13 March) to just RMB 16.5/t (27 March), with eight tenders at this grade. No tenders were reported for 2 April, likely due to the Qingming holiday and buyers pausing after the late-March rally.
Regional demand shifts
Demand shifted away from China and India towards Southeast Asia and South Korea. Chinese buyers prioritised domestic coal amid soft local prices. Indian buyers took only short-term positions; power plant stocks stood at 59.29 mnt (19 days of burn), though 20 plants operated with critical stocks.
South Korea and Taiwan actively considered Russian coal. Cement manufacturers increasingly pursued Russian high-CV thermal coal amid surging petcoke prices.
Outlook
Indonesian low-rank appears well-supported into May-June, driven by Southeast Asian demand, supply constraints, and consistent index premiums. Australian high-CV faces a more uncertain path: absolute prices have risen, but index discounts indicate resistance. Chinese domestic plateauing suggests near-term consolidation unless restocking accelerates.
For now, the market’s centre of gravity lies firmly in Indonesian low-rank coal, where buyers are paying, sellers are holding firm, and momentum remains clearly upward.
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