Portside prices of Indonesian thermal coal in India witnessed a noticeable correction this week for GAR 5000 kcal/kg coal, which was assessed at INR 13,000/t, down INR 1,000/t w-o-w at Kandla.
GAR 3400 kcal/kg coal was assessed at Navlakhi Port to have fallen by INR 400/t to INR 6,500/t. Prices exclude cess and GST.
However, portside availability of GAR 4200 kcal/kg coal was scarce and hardly any offers were heard.
The downtrend in portside prices came even as imported Indonesia-origin coal prices fell sharply by $33/t last week (on 18 March) amid reduced buying interest from China due to lockdown restrictions.
Trade sentiments change after Holi
With the decline in prices after Holi, many purchase enquiries were heard today, sources informed.
In fact, a few buyers were heard making small-to-medium parcel purchases, while avoiding bulk bookings, amid volatile market conditions and expectation of a price correction.
The rising premiums fetched by domestic coal in recent CIL auctions and limited availability has left the non-power sector in the country with little option other than relying on imports.
Indonesian coal arrivals
A total of 1.5 mnt of Indonesian coal are set to arrive at various Indian ports between 21 Mar-8 Apr’22, CoalMint vessel line-up data reveals. Adani Enterprise is bringing in the highest amount of coal at 0.42 mnt, followed by Tata Power and Rayalaseema at 0.16 mnt each.
Navlakhi Port is set to receive the highest quantity of Indonesian coal at 0.36 mnt, followed by Hazira and Gangavaram ports at 0.22 mnt and 0.17 mnt, respectively.
Indian buyers of imported coal have retreated to the sidelines amid uncertainty in the market. Despite the price correction, a few Indonesian sellers are heard offering coal at a premium.
“Even after the index fell, miners continue to offer material at a premium for some grades. A cargo of 4200 GAR for April loading was offered at a premium of $8/t,” a Gujrat-based trader informed.
Covid surge halts China demand
As China faces its worst outbreak of Covid-19 since 2020, import enquiries for Indonesian coal fell drastically as traders expected a prolonged lockdown by the government in the coming days.
Higher domestic production coupled with rising interest in Russian coal contributed to the decline in enquiries for Indonesian cargoes. The ongoing war between Russia and Ukraine has compelled Russian miners to offer coal at discounted rates to China.
Demand for Indonesian coal from Europe and several other Asian buyers trended lower last week amid expectations of an imminent price correction, market sources said.
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Short-term outlook
Indonesian coal prices are likely to remain under pressure amid declining demand from China. Portside prices are also edging lower, as per CoalMint assessment.
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