Portside prices of Indonesian coal were largely stable as the progress of the government (Indonesia) in lifting the coal export ban continued to remain slow.
Prices for 4200 GAR were assessed at INR 8,300/t at Kandla Port, while that of 5000 GAR were at INR 10,000/t. Prices exclude cess and GST.
Trading activity at Indian ports, however, has picked up as several end-users preferred to buy smaller quantities of material in fear of a rise in prices, going ahead. The limited vessel arrival from Indonesia in the upcoming week was seen motivating buyers to procure coal.
Indonesian coal stock with Indian traders, on the other hand, has turned limited as vessel arrival from the country was hampered in the last two weeks amid the export ban.
Although the ban has been partially lifted and 37 vessels have received clearance to depart, a total of 0.39 mn t of coal-laden vessels are scheduled to arrive at Indian ports in the upcoming days.
Thermal coal stock with power plants are assessed at 23.63 mn t, sufficient for nine days, data from the Central Electricity Authority showed. Domestic coal offering from Coal India has increased sharply for the power sector as it has offered a total quantity of 12.74 mn t for Jan’22.
Imported coal demand from the power sector, in particular, remains limited amid higher thermal coal prices on a y-o-y basis, while that from the brick and ceramics industry remains subdued amid the current market dynamics.
Indonesia releasing stranded vessels
With the export ban entering its 18th day, the pace of restriction easing remains slow in Indonesia with the government meticulously verifying and clearing vessels.
The government is likely to release an additional 22 coal-laden vessels for export, following the 37 vessels last week, according to market sources.
The ministry of energy and minerals is expected to grant export permission to companies that have fulfilled their Domestic Market Obligation (DMO). Indonesian miners have an obligation to supply 25% of their annual production volume to the domestic market.
Currently, the government has been reviewing the November and December DMO obligation by miners. According to market participants, the delay in vessels is likely to spill over to the next month, thereby exerting pressure on supply.
Short-term outlook
Indonesian as well as portside coal prices are likely to remain elevated in the coming week as the pace of supply from the country remains limited.
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