Indonesian coal prices which remained at higher side on account of low production have shown sign of softening this week.
Indonesian Coal Prices were affected by Chinese governments’ decision to ban coal imports at small ports and tight customs clearance checks in many ports. However, Coal imports at major ports are not affected by this move.
Many small ports are owned by power plants on the coast and import ban would increase shipping and loading charges. As, coal loading fee at major port is higher than those at the smaller ports.
The reason behind Chinese government’s move to ban coal imports is to reduce coal imports; also the government has urged coal miners to speed up coal production to meet the demand in summer period.
Chinese Power utilities have started to consume more domestic coal, but power plants designed on imported coal are forced to import coal. One possible way to import coal was to receive coal at major ports and then transfer it to power station by local transportation, but this would increase their cost of transportation.
As a result of slow buying activity from China, Indonesian coal prices have fallen by USD 1-2/MT this week. Indonesia Coal Index (ICI 1, 6500 Gar) has fallen 0.91% W-o-W to USD 81.65/MT this week.
Spot offer for 5000 GAR coal was assessed at USD 55-56/MT, FoB Kalimantan. 4200 GAR prices fell to USD 41/MT, FoB Kalimantan, while 3800 GAR coal prices were assessed at USD 34/MT, FOB Kalimantan this week.
Indian Coal Market:
Indian buying activity has also slowed down amid monsoon season and implementation of GST in the country. Buyers are facing some confusion regarding implementation of the tax in the beginning, and are expecting more clarity regarding this in the coming weeks.
At present, offers for 4200 GAR coal was heard at USD 49/MT, CFR India. While that for 3800 GAR coal at USD 42/MT, CFR India.
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