Indonesian Coal prices have further increased this week, with price of higher grade coal showing larger increment than lower grade coal prices.
Heavy rainfall in Kalimantan continued to limit coal supply from Indonesia, which were affecting coal prices. Indonesian coal prices were also supported by the rising Newcastle coal prices.
Buying activity from China was strong as they look to stock coal for the summer season, resulting in surge in Australian thermal coal price, which is also facing supply constraints.
Since, Australian thermal coal prices are correlated with Indonesian higher grade coal, so prices are increasing consequently.
Indonesian coal index ICI 1 (6500 GAR) has increased 7.21% W-o-W to USD 88.68/MT this week compared with USD 82.71/MT a week ago.
While Prices of High grade coal has increased by larger margins, lower grade coal prices have not changed much over the week.
Spot Offer for 5000 GAR coal was heard at USD 58/MT, FoB Kalimantan. While 4200 GAR coal and 3800 GAR coal prices were assessed at USD 42/MT, FoB and USD 35/MT, FoB Kalimantan respectively.
Indian Market Scenario:
Indian buying demand has been muted by the ongoing monsoon season, however demand from India sugar mills is expected to increase due to low availability of bagasse( sugarcane waste, which is used as fuel for power generation) after summer, thereby causing mill industry to look for imported coal for power generation.
However, it may not affect prices significantly as only a few sugar mills in India are opting imported coal now a days, commented an Indian trader.
Spot offer for 4200 GAR coal was assessed at USD 50/MT, CFR India, While 3800 GAR coal was offered at USD 43-44/MT, CFR India.
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