- Cess component makes older inventories costlier
- Power plant stocks fall to only 16 days of consumption
The Indian portside market for Indonesian thermal coal recorded significant gains during the week ending 26 September 2025, as traders adjusted prices to recover cess on older stocks following the implementation of the new GST reform on 22 September 2025.
BigMint’s assessments showed the 5000 GAR grade rose by INR 150/tonne (t) w-o-w to INR 7,100/t at Kandla and INR 7,000/t at Vizag. The 4200 GAR grade also increased by INR 250/t to INR 5,900/t in Kandla and INR 5,800/t in Vizag, while the 3400 GAR grade climbed up by INR 300/t to INR 4,500/t in Navlakhi.
Traders maintain margins through cess loading
Although new cargoes arriving under the revised GST framework are exempt from the cess, market participants indicated that traders are likely to continue incorporating part of the cess component into their selling prices. This strategy is aimed at safeguarding margins and ensuring profitability. However, buyers’ acceptance of these prices is still under scanner, as they maintained a wait-and-watch mode. New arrivals may keep prices under pressure.
Freight market softens on Indonesian route
Freights for Indonesian coal eased during the week, reflecting subdued trading activity. Supramax coal freights on the Indonesia (East Kalimantan)-India (Navlakhi) route fell to $14.47/dmt, marking a w-o-w decline of $1.24/dmt. The weakness was attributed to quiet market conditions across the Pacific basin and Indian Ocean, with only limited activity reported on the Indonesia-India coal route.
Declining power plant inventories raise concerns
Coal inventories at Indian power plants dropped to 47.39 mnt as of 24 September 2025, down from the previous week and sufficient for just 16 days of consumption. The decline placed 18 plants under the critical stock category, including nine dependent on domestic coal, eight reliant on imports, and one using washery rejects. The reduction in stock levels has heightened concerns over fuel security amid constrained arrivals.
Portside coal inventories record a marginal increase
At the portside, thermal coal inventories edged higher by 0.4% w-o-w to 11.93 mnt in week 38 from 11.88 mnt in week 37. While overall activity remained subdued, selective stocking at a few ports offset declines elsewhere, signaling cautious market engagement.
International market registers modest gains
International prices for Indonesian coal witnessed limited upward movement during the week. The 5800 GAR grade rose by $0.87/t w-o-w to $76.48/t, while the 4200 GAR grade gained $1.34/t to $43.87/t, and the 3400 GAR grade edged up by $0.29/t to $30.63/t. The modest rise was supported by selective regional demand recovery and tighter supply conditions, though overall momentum remained muted.
Outlook
Indian portside coal prices are expected to stay firm in the near term, supported by cess-linked pricing strategies and falling power plant inventories. While new cargoes are exempt from cess, traders may continue factoring part of it into prices, keeping premiums intact. However, easing freights and weak international momentum could cap further gains, with market direction hinging on inventory restocking and traders’ pricing approach for fresh arrivals.
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