Indonesian coal market has witnessed slow buying activities from China this week. Also, improved weather after a series of rainfall has restored normal coal production in Indonesia, stabilising coal prices.
Most of the Chinese buyers have covered up for Aug’17, added to the cool temperature prevailing across the country has brought down coal demand. While, Indonesian coal miners dealing with backlogs are holding back offers.
Recent offers for 5000 GAR coal was heard at USD 59-60/MT, FoB Kalimantan. For 4200 GAR coal prices were assessed at USD 42/MT FoB Kalimantan while 3800 GAR coal price was USD 36/MT this week.
The coal ban imposed by Chinese government at small ports had forced buyers to receive coal at alternative ports, which added to the transportation cost. In order to combat these added costs, Chinese buyers have been heard of booking higher Calorific coal more which are fewer required in comparison with lower CV cargoes.
As a result of high buying of High CV coal, Indonesian coal index ICI 1 (6500 GAR) coal has increased 3.35% W-o-W to USD 91.58/MT this week.
Indian Market Scenario:
In India, Coal imports from Indonesia has been flowing steadily despite increased domestic coal supply from CIL, as power plants designed on imported fuel have to import coal for their operation.
However, Non-coking coal imports from Indonesia have declined 23% on the month to 6.07 MnT in Jul’17, on account of coal stocking done prior to monsoon period.
Current offers for 4200 GAR coal was assessed at USD 50/MT, CFR India and 3800 GAR coal at USD 44/MT, CFR India.
Indonesian Benchmark Price:
Indonesia’s Ministry of Energy and Mineral Resources has set coal reference price, Harga Batubara Acuan (HBA) at USD 83.97/MT for Aug’17. HBA reference price has sharply increased to reach its highest level since Jan’17.
HBA price in Aug’17 was 44% higher on the year compared with USD 58.37/MT in Aug’16, and 6% higher on the month compared with USD 78.95/MT in Jul’17.
The latest increase in HBA reference price has followed the surge in Indonesian and Australian coal price amid supply concerns through Jul’17.
HBA set for the month is based on 6,322 GAR coal and is used as basis to calculate prices of 77 Indonesian coal product also the royalties paid to the government by the mining firm.
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