Indonesian Coal offers continue to rally on the grounds of strong Chinese demand. While prices have hit its 18 months highest since Mar’15.
As we have reported earlier, Indonesian coal market has been booming, it continues to move up further on account of sharp rise in Chinese coal imports. After a sharp growth of USD 3-5/MT in a couple of weeks, offers have risen again by USD 1/MT, FoB in week 37. While, Indonesian steam coal continue to offers higher for Oct’16 shipments.
Indonesian 4,200 GAR coal, highly preferred by Indian and Chinese utilities are offering at USD 34-34.5/MT, FoB for Sep’16 loadings. 3,800 GAR coal is being offered at USD 27/MT, FoB. Whilst high CV 5,000 GAR is being available for Oct’16 shipments at USD 50/MT, FoB Kalimantan.
Since there is a sharp rise in Indonesian coal offers, it not seems feasible for Indian utilities which resulted into shift in buying interest from imported towards domestic coal.
In India, CFR offers for 4,200 GAR are heard at USD 40-41/MT at West Coast ports for Sep’16 loadings. Low CV Indonesian 3,800 GAR is offering at USD 32-33/MT, CFR. While 5,000 GAR is being available at USD 57/MT, CFR.
According to an Indian trader, “In Indian context, Only handful of Indian buyers are rising their bid in the market as they are relatively quit for higher priced imported grades when indigenous coal is available at lower cost. Moreover, they are still confused for near term market outlook.”
Besides, continuous rising international coal offers, coupled with monsoon in India resulted into fall in Indonesian coal imports in Aug’16, which stood at 8 MnT with a fall by 10%, compared to Jul’16.
Indonesian Coal offers at Indian Ports
Stock and sale offers have also increased at Indian ports about INR 100-200/MT. Now Indian buyers prefer to opt coal from stocks as older material is available at cheaper cost than new arrivals.
• Indonesian 4,200 GAR coal is offered at INR 3,600-3,700 stock and sale at Kandla port (all duties and clearance included, VAT & CST will be added further).
• 3800 GAR is being available at INR 2,600-2,700/MT at Kandla & Paradip port. While, 3,400 GAR is offered at INR 2,500/MT at the same Port (taxes will be added further).
Moreover, at present coal market is entirely China driven, as China is leading the market and willing to pay higher, where India is struggling to negotiate for the same grade material.
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