Indonesian coal market is not reflecting any positive hope to strengthen soon as persisting scenario made miners and traders pessimistic towards recovery. Indian buyers keen to import high GCV Indonesian grade owing to narrowing price gap between different grades.
India, one of the largest coal importer from Indonesia, received about 55-60% thermal/steam coal from the country. But, India is not tuning good this year (2016) for Indonesian coal market as domestic supply has increased by CIL, which is hampering the largest exporters to India.
Global coal prices have been fallen sharply in last one year and still directed to fall further as Chinese and Indian industries are not performing well; also countries are focusing on domestic supply.
Moreover, it is to be noted that fall in Indian coal imports coupled with high negotiations from buyers are putting more pressure on Indonesian coal market to go down.
Current offers are witnessed at USD 25.5-26/MT, USD 20-21/MT, USD 37-38/MT, FOB for Indonesian 4200 GAR, 3800 GAR and 5000 GAR respectively. Indonesian 4200 GAR is being offered at USD 29-30/MT, CFR Kandla port in Panamax shipment for Mar’16 loading.
[su_pullquote align=”right”]One India based trader mentioned, “There is some demand for 5000 GAR from Indian buyers. On the other side, Indian buyers are preferring to import High GCV Indonesian grade instead of low GCV as price gap has been narrowing down day-by-day.“[/su_pullquote]
At Paradip port, Indonesian 4200 GAR and 3800 GAR are being traded at USD 31/MT and USD 25.5/MT, CFR for Mar’16 shipments.
Few market experts anticipated that currently Indonesian market is running under pressure as ratio of imported martial in India is dominated by extra domestic supply, which may create more trouble for Indonesian thermal coal market.
Indonesian coal production, export and domestic market obligation
Indonesia’s Energy and Mineral Resources Ministry reported a downfall of 14.5% in coal production during 2015, which was marked about 425 MnT for the year. However, Indonesian coal miners have cut production by 20% in 2015.
Indonesian coal production, export and consumption
| Particular | 2007 | 2008 | 2009 | 2010 | 2011 | 2012 | 2013 | 2014 | 2015 | % Change Y-o-Y |
| Production | 217 | 240 | 254 | 275 | 353 | 412 | 474 | 458 | 392 | -0.144 |
| Export | 163 | 191 | 198 | 210 | 287 | 345 | 402 | 382 | 295 | -0.228 |
| Consumption | 61 | 49 | 56 | 65 | 66 | 67 | 72 | 76 | 87 | 0.145 |
| Price (HBA) | n.a | n.a | 70.7 | 91.7 | 118.4 | 95.5 | 82.9 | 72.6 | 60.1 | -0.172 |
Quantity in MnT
Prices in USD/MT
Source: Ministry of Energy and Mineral Resources
Since the beginning of 2015, Indonesia’s benchmark thermal coal prices have been on a line to falling constantly, sourced by Ministry of Energy and Mineral Resources. India is a big market for Indonesian coal and also further lead to drive thermal coal market strongly.
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