Indonesian Coal prices have remained firm this week, miners struggling to meet their obligations amid low production.
Indonesian coal prices, which have been on the rise since last month, found support from increasing demand from Chinese buyers.
Domestic coal availability in China is not sufficient to meet their demand, so buyers are exploring import markets. As a result, Indonesian coal prices are not expected to soften in the coming weeks.
Indonesian Coal Index (ICI1, 6500 GAR) was assessed at USD 82.40/MT this week, higher by 0.78% W-o-W compared with USD 81.76/MT a week before.
Indonesian coal supply is expected to remain tight in July following the festive month, commented an Indian Trader.
Spot offer for 5000 GAR coal was assessed at USD 57/MT, FoB Kalimantan. 4200 GAR coal prices were heard at USD 42-43/MT, FoB Kalimantan, while price offers for 3800 GAR coal was heard at USD 35-36, FoB Kalimantan.
Chinese Customs to Increase checks on Coal Imports:
Chinese General Administration of Customs had proposed a plan to increase checks on coal imports that could slow down the flow of coal imports into the country.
Also, Chinese coal producer Shenhua has suspended coal sales to spot market to prioritise long term contracts with power utilities, with rising temperature during summer season pushing up power generation demand from utilities.
The main aim of Shenhua behind this move is to ensure adequate coal supplies under its term contracts and to keep domestic coal supply steady.
Although many power utilities have secured supplies through term contracts, Shenhua’s suspension of spot coal sale has tighten overall coal supply in spot market.
Port prices for domestic thermal coal 5500 NAR have accelerated from Yuan 555/MT, FOB Qinhuangdao in the first week of Jun’17 to surpass Yuan 600/MT this week.
Indian Market:
Indian buying has slowed down during Monsoon season. Also, trade activities have stalled as market participants wait to access the impact of GST on coal imports and prices.
4200 GAR coal was offered at USD 50-51/MT, CFR India, while 3800 GAR coal is offered at USD 43-44/MT, CFR India.
Leave a Reply