Indonesia’s thermal coal export shipments registered a 15% m-o-m fall to 27.2 million tonnes (mn t) in Nov’21, CoalMint’s vessel line-up data revealed.
The sharp fall came against the backdrop of supply disruptions following heavy rainfall this year and buyers delaying import bookings in anticipation of a further correction in prices.
The highest decline in exports was recorded in the case of China which fell to 13.2 mn t, down 19% m-o-m.
After rising sharply since Apr’21, the rally in the Indonesian coal index eased with over $60/t fall last month. 5000 GAR prices recorded the highest decline to $115/t in Nov’21, down 37% m-o-m.
Despite the fall in prices, Chinese buyers refrained from making any major bookings amid improving domestic production and a fall in thermal coal prices back home.
Several Chinese buyers last month were even heard defaulting on payments or bidding at lower prices as thermal coal futures on the Zhengzhou Commodity Exchange slumped to RMB 840/t ($131.9/t) by end-Nov’21, down 58% since mid-Oct’21.
Coal production in China has picked up sharply to cater to its rising winter demand as average daily coal output was reported at around 12 mn t which is higher by 2 mn t compared to the country’s daily consumption levels.
Shipments to India decline
Indonesian export shipments to India fell by 22% m-o-m to 4.4 mn t as importers awaited further price corrections.
Improving domestic production and weak demand for imported coal also played their part as shipments fell drastically from Indonesia.
A domestic coal supply crunch in Oct’21 had compelled several importers to book Indonesian cargoes at a $10/t premium. However, in Nov’21, sufficient quantities with end-users and importers prompted them to keep to the sidelines.
Output from Coal India Ltd (CIL) and its subsidiaries has risen by 4% m-o-m to 53.8 mn t in Nov’21, while offerings also witnessed an exponential growth to 19.47 mn t last month with supplies picking up steadily across all sectors.
Exports to other Asian countries
Volatility in the natural gas market last month surrounding peak winter demand and supply concerns in Europe compelled countries like South Korea and Pakistan to raise their Indonesian coal purchases.
Export shipments to South Korea were recorded at 1.7 mn t, up 28% m-o-m, while that to Pakistan were at 0.19 mn t, up 21% m-o-m.
Shipments to the Philippines, however, fell by 19% m-o-m to 2.0 mnt, while that to Malaysia were at 1.6 mn t, down 10% in Nov’21.
Outlook
CoalMint believes export shipments from Indonesia are likely to remain under pressure in the upcoming month amid reduced coal bookings from China due to its rising production and anticipation of weak demand ahead of the Lunar New Year Holidays and Winter Olympics early next year.
Indian import demand is likely to remain in a tight range due to improving domestic supplies.
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