- Portside thermal coal inventories decline but fail to support prices
- Weaker Chinese demand weighs on Indonesian benchmark prices
Indian portside prices of Indonesian-origin thermal coal softened during the week ended 03 July 2026, primarily due to subdued buying activity and ample domestic coal availability, which continued to reduce reliance on imported cargoes.
A market participant noted, “Limited trading activity across major ports, with lower lifting volumes reflecting cautious procurement by consumers. Additionally, reduced import demand from China also weighed on the overall seaborne thermal coal market, limiting any upward price momentum.”
Another participant said “procurement had been limited to need-based buying during the US-Iran conflict, when elevated Indonesian coal prices discouraged inventory accumulation. Since then, lower freight rates and softer prices have supported a gradual recovery in demand. However, limited cargo offers from Indonesia due to policy uncertainty, coupled with previously low stock levels, have resulted in tighter spot availability and discouraged procurement.”
Prices inch down by INR 50/t across grades
Premium-grade Indonesian coal availability remained adequate, preventing any significant price appreciation despite emerging supply-side concerns from Indonesia. Prices of 5,000 GAR Indonesian coal declined by around INR 50/t w-o-w, settling at approximately INR 10,950/t at Kandla and INR 10,850/t at Vizag.
Similarly, 4,200 GAR coal prices eased by around INR 50/t to nearly INR 9,050/t at Kandla and INR 8,950/t at Vizag. Lower-calorific 3,400 GAR coal also corrected by approximately INR 50/t, reaching around INR 6,950/t at Navlakhi, reflecting weaker demand for lower-grade imported material amid comfortable domestic fuel availability.
Freights correct as geopolitical risks ease
Freight rates for Supramax vessels operating on the East Kalimantan-Navlakhi route declined slightly during the week, falling by approximately $0.4/t w-o-w to around $20.4/t. The correction was largely driven by improving geopolitical sentiment and low-demand.
Port inventories continue to decline gradually
Thermal coal inventories at major Indian ports declined by around 2% w-o-w to 14.83 million tonnes (mnt) in week 26, compared with 15.07 mnt in the previous week. The decline was primarily attributed to steady cargo evacuation by power producers and industrial consumers. Nevertheless, inventory levels remained comfortable, with fresh vessel arrivals at select ports partially offsetting the overall reduction in stockpiles.
Power plant stocks decline w-o-w
Coal inventories at Indian thermal power plants decreased by around 3% w-o-w to approximately 43.4 mnt as of 02 July 2026, equivalent to nearly 14 days of consumption. Despite the decline, domestic coal supply remained adequate. Nearly 31 thermal power plants continued to report critical inventory levels, highlighting regional supply imbalances and logistical constraints rather than an overall shortage of coal.
Global thermal coal market remains under pressure
International thermal coal prices continued to weaken during the week as subdued import demand from key consuming countries, particularly China and India, weighed on market sentiment. Indonesian benchmark prices declined across major grades, with 5,800 GAR coal falling by around $1-2/t w-o-w, while 4,200 GAR and 3,400 GAR prices eased by approximately $0.5-1/t. The softer pricing trend reflected cautious procurement strategies, comfortable inventories among end-users, and limited buying interest across China and the Asian seaborne market.
Outlook
Indian portside thermal coal prices are expected to remain stable or weaken slightly over the coming weeks. Comfortable domestic coal availability, adequate inventories at ports and power plants, and subdued import demand are likely to continue limiting buying interest.
Although lower freight rates and potential supply constraints from Indonesia may provide some support, abundant domestic supply and weak purchasing activity from major Asian importers, particularly China, are expected to keep international thermal coal prices under pressure. Any sustained price recovery is likely to depend on a meaningful improvement in power demand, inventory replenishment by industrial consumers, or further tightening in Indonesian export availability.
Leave a Reply