Low CV Indonesian coal prices remained firm as Chinese buyers continued to seek cargoes for June loadings while heavy rain in Indonesia limited flow of supply into the market.
Chinese demand strengthened post-holiday as increasing inventories pushed requirement of low-CV coal for blending by the end-users. Also, Chinese tenders had also supported Indonesian coal prices, particularly 4200 GAR.
However, the bad weather condition in parts of Indonesia coupled with low production efficiency during the fasting month of Ramadan had resulted in a slight disruption in supply.
4200 GAR coal prices were assessed at USD 38/MT, FOB Kalimantan for June loadings.
On the other hand, demand for Indonesian mid- and high-CV had been subdued. Indonesian Coal Index (ICI 1, 6500 GAR) had fallen 0.5% W-o-W to USD 76.41/MT this week. While ICI 3(5000 GAR) coal index has fallen by 2.13% W-o-W to USD 53.26/MT.
Indian Market Scenario:
Indian buyers struggled for Low-CV coal during the week as the availability of this grade of coal has been limited and many Indonesian traders considered selling coal to China market first.
Also, the news of GST (Goods and services Tax) implementation has affected buying from India, as buyers have reduced pre- monsoon coal stocking this year. Buyers have opted against holding large quantities of coal.
Offers for 4200GAR coal were heard at USD 45-46/MT, CFR East Coast India, while that for 3800 GAR coal at USD 40-41/MT, CFR East Coast India.
Stock and sale offer for 3600 GAR coal was heard at INR 3250/MT. Same offers for 3800 GAR coal were heard at INR 3700/MT and that for 4200 GAR at INR 4100/MT(VAT/CST plus TCS charges to be included) at Vishakhapatnam port.
Indonesian HBA Benchmark Coal Price:
Indonesia’s Ministry of Energy and Mineral Resources has set HBA (Harga Batubara Acuan) thermal coal reference price at USD 75.46/MT for Jun’17.
Reference price for Jun’17 has fallen 9.96% M-o-M compared with USD 83.81/MT in May’17, while reference price has increased 45.48% Y-o-Y compared with USD 51.87/MT set during Jun’16.
The Benchmark price for thermal coal is the basis for determining the prices of 75 Indonesian coal products and calculating the royalty producers have to pay for each metric tonne of coal they sell.
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