Indonesian coal price has remained firm on account of aggressive buying from China, as the country’s coal demand for winter season continued.
Coal prices have been falling in the month of Nov’17 when Chinese buying was slowed down as buyers were waiting for winter season to start. However since the beginning of Dec’17, prices have witnessed a hike of USD 2-3/MT.
According to the CoalMint price assessment of Indonesian coal, monthly average price of 4200 GAR coal was USD 44.6/MT, FoB Kalimantan in Nov’17, which has now gone up to USD 46-47/MT, FoB Kalimantan in Dec’17.
Of late, the policies set by the government affect Chinese coal buying which in turn reflects on Indonesian coal prices. The Chinese government had earlier imposed import restriction at small ports to promote domestic coal; now the country had decided to make a shift towards natural gas from coal burning in order to curb pollution.
However, the implementation to phase out coal did not go as per the plan due to the shortage of natural gas in the domestic market. Consequently, China’s policy maker National Development and Reform Commission has now urged coal companies to increase supplies of high grade coal to ensure heating fuel for winter.
The need for coal in the country has compelled coal buyers to remain active in Indonesian coal market which are supporting the prices. Offer for 5000 GAR coal was heard at USD 66-67/MT, FoB Kalimantan.
Indian Market Scenario:
As a result of the aggressive buying from China, Indian buyers were finding it difficult to match offers to procure Indonesian coal shipments.
An Indian trader has commented that many Chinese buyers have already covered their demand up to Jan’18; and with coal production in Indonesia affected due to bad rain, those miners having shipments are offering too high for Indian buyers.
Market participants have anticipated that Chinese coal buying is likely to continue till Jan’18 only after which Indonesian coal prices would start to fall.
Indonesian 4200 GAR coal offer was heard at USD 56-57/MT, CFR India, while 3800 GAR coal price was USD 47-48/MT on CFR India basis.
Stock and Sale offer for 4200 GAR coal was heard INR 4700-4800/MT (GST 5%, TCS 1% to be added) at Hazira and Dahej ports.
Leave a Reply