Indonesian coal prices extended its downward trend on account of low Chinese demand, amid restrained buying from India.
Trade levels for Indonesia coal witnessed further fall during the week, as Chinese demand for imported coal continued to wane.
Chinese buyers had turned towards the domestic market for supply, as a result of weaker domestic thermal coal prices.
Market participants were anticipating Chinese demand for imported coal to remain subdued for a few more weeks, as the Chinese power producers were having sufficient time to begin coal restocking ahead of the peak summer consumption season.
With the ample of stock present at the power plants, power producers were reportedly content with the domestic supply instead of looking for imported coal.
Moreover, the recent imposition of import restriction at ports is also likely to dampen the buying sentiments, exerting further pressure on Indonesian coal prices.
Indonesian 4200 GAR coal offers were heard at USD 40-41/MT, FoB Kalimantan. 3800 GAR coal was priced USD 30/MT, FoB Kalimantan.
Indian Market Scenario:
Indian coal imports from Indonesia had recovered in Mar’18, after falling in the month of Jan’18-Feb’18.
Buyers had restrained themselves from taking position as they were waiting for the prices to become stable, but with the demand for coal rising in the peak summer season, imports too had gone-up simultaneously.
The declining prices were likely to draw more attention among the buyers, as the price of 4200 GAR coal, majorly preferred among the buyers, had come down to USD 50-51/MT, CFR India.
On the other hand, An Indian trader had raised concerns that the declining prices had affected his stock and sale business. According to him, the current coal price had significantly come down from the prices on which he had bought the material. Hence, it was not economical to lower his offer in the stock market.
He added a major coal trader at east coast had reduced its previous stock and sale offer for 5200 GAR by INR 300/MT to INR 5600/MT (excluding GST).
Current offers for 5000 GAR Indonesian coal were heard at USD 69-70/MT, CFR India.
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