Indonesian coal prices remain stable this week, as cooler temperature prevailing across China has put a lid on the country’s rising thermal coal demand. Moreover, market participants doubt the sustainability of current prices.
Indonesian coal index ICI1 (6500 GAR) coal had increased by mere USD 0.51/MT during the week to USD 93.01/MT, compared with the week-ago price of USD 92.5/MT, indicating softening in coal prices.
Thermal coal has experienced an aggressive rally this summer as supply disruptions and rising Chinese demand had boosted the coal prices.
Chinese coal demand had increased due to the high temperature during summer season, but now the temperatures have cooled down, coal demand has also lowered as a result.
Offer for 5000 GAR coal was assessed at USD 60/MT, FoB Kalimantan this week. While 4200 GAR coal and 3800 GAR coal prices were assessed at USD 42/MT, FoB Kalimantan and USD 35/MT, FoB Kalimantan respectively.
However, the downtrend in coal prices is not expected to sustain for too long. Before Chinese buyers’ begin coal pre-stocking during the winter season, which may cause further rally in prices.
Indian Market Scenario:
Indonesian miners would be looking for more enquiries from Indian buyers post-monsoon. Coal import from Indonesia has fell 19% W-o-W to 1.25 MnT this week (6-12 Aug’17).
The falling coal stocks at Indian power plants would encourage buyers’ to import more. As, coal stock at Indian power utilities has reached 13.309 MnT sufficient enough for 9 days of power generation as on 21 Aug’17, according to the CEA report.
Price of 4200 GAR coal was heard at around USD 50/MT, CFR India, while for 3800 GAR coal price was assessed at USD 43/MT, CFR India.
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