- India’s thermal coal demand remains weak due to sufficient stocks
- Indonesia lowers benchmark HBA index for second half of Mar’25
Indonesian thermal coal prices at Indian ports remained largely unchanged w-o-w as on 21 March, with both low and high-grade coal grades exhibiting stability. Demand from India has remained subdued, owing to substantial stockpiles at the country’s ports, alongside prevailing uncertainties regarding future market conditions.
Demand for pre-summer restocking, typically seen between February and April, has been slower this year compared to last year. This slowdown is primarily due to a mix of global economic uncertainties, fluctuating commodity prices, and evolving market conditions.
In contrast, the textile and paper sectors are experiencing strong demand, supported by seasonal requirements and steady production needs. However, the chemical sector is facing difficulties, with weaker demand driven by rising raw material costs and global market challenges.
Coal stocks at Indian power plants
As of 19 March, Indian power plants held a total of 55.85 million tonnes (mnt) of coal, which represents approximately 19 days of consumption. This suggests that power plants are sufficiently stocked. However, concerns have surfaced as nine plants using domestic coal, five relying on imported coal, and five dependent on washery rejects approaching critical stock levels, as reported by the Central Electricity Authority.
Price movements at key Indian ports
At Kandla, prices of 5000 GAR coal remained steady at INR 7,800/t, while 3400 GAR coal at Navlakhi held firm at INR 4,950/t. In contrast, prices for 4200 GAR coal experienced a modest rise of INR 150/t at Kandla, bringing the price to INR 6,050, and a gain of INR 100/t at Vizag, pushing the price up to INR 5,900/t.
Indonesian coal index prices
Indonesian coal prices saw slight w-o-w decreases. High-calorific value (CV) 5800 GAR coal dropped by $0.24 to $85.13/t, mid-CV 4200 GAR also decreased by $0.24 to $49.68/t, while low-CV 3400 GAR slightly gained $0.08, reaching $32.36/t. However, demand from major consumers like China and India remains subdued due to large stockpiles, leading to a cautious, wait-and-watch approach in the seaborne market.
Indonesia cuts coal reference prices
In response to the global coal market downturn, Indonesia’s Ministry of Energy and Mineral Resources (ESDM) reduced its thermal coal reference prices (HBA) for all grades in the second half of March. High-calorific value coal dropped 8.2% to $117.76/t, while mid-CV coal fell 2.4% to $80.7/t. Prices for lower-CV grades, including 4,100 kcal/kg GAR, reached a record low. ESDM will update the HBA bi-weekly, using a new methodology based on previous month’s trading data.
Outlook
In summary, thermal coal prices at Indian ports have maintained stability amidst subdued demand and ample stockpiles. While prices for certain coal grades have seen slight increases, global market trends and price adjustments continue to influence the coal landscape. With ongoing uncertainties in the market, stakeholders in the coal industry remain cautious as they monitor developments that may impact future demand and pricing trends.
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