Indonesian coal prices have maintained its steady pace buoyed by strong demand from China, as the country undergoes extreme cold weather.
The severe cold had spurted coal demand in China, as the coal stocks at many power plants were running low, thereby requiring prompt cargo. On the other hand, Indonesian coal producers were unable to cater the growing demand, since rainfall at Kalimantan had kept coal availability tight, thereby supporting prices.
Indonesian 4200 GAR coal prices were offered at USD 49-50/MT, FoB Kalimantan. Whereas offers for 3800 GAR coal were heard at USD 39-40/MT.
The prospect of coal shortage at power plants had forced major Chinese power producers to demand more coal supply from the government, as daily coal consumption rates were also high during the peak season. Moreover, snowfall in various parts of the country had also made domestic coal transportation difficult.
The utilities had even urged the government to step up coal production during the festive season so as to increase the stockpiles at power plants.
The rising coal prices in Indonesia had lowered the appetite for imports among the Indian buyers. According to the data maintained by CoalMint Research, Indian coal import from Indonesia had fallen 44% W-o-W to 1.15 MnT during 14-20 Jan’18.
”Offers for 5000 GAR coal at USD 80-81/MT, CFR India, were too high for buyers to conclude deals, highlighted an Indian trader.”
However, he reckons that the coal prices would soften around the Chinese New Year holidays; adding that the improvement in weather would consequently ease the difficulty in coal transportation, lowering domestic coal prices, which would eventually bring down import demand from China.
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