Indonesian coal prices have remain depressed this week, weighed down by low Chinese demand.
The decline in domestic thermal coal prices in China had lowered the imported coal demand from buyers, who had already stocked sufficient coal for winter requirements.
Moreover, market participants have informed that low Indonesian domestic coal consumption was also supporting the decline in coal offers.
An Indian trader commented that Indonesian domestic coal prices were decreasing as a result of the low consumption, which were pulling down the export offers as well.
Indonesian coal miners had reason to hold on to their export offers when the domestic coal prices were strengthened, but with the softness in domestic prices, miners have started to lower their expectation for export offers.
Indonesian 4200 GAR coal was offered at USD 42-43/MT, FoB Kalimantan. Offer for 3800 GAR coal was heard at USD 35/MT, FoB Kalimantan.
Indian Market Scenario:
Indian demand for Indonesian coal is expected to increase with the ongoing summer season.
As per the data provided by CEA, coal consumption at the Indian power plants had fallen to a 7-month low of 48.129 MnT in Feb’18; however, with the coal consumption set to increase in Mar’18, demand for coal is likely to rise accordingly.
Besides, the power plants were reported to have a coal stock for 10 days of power generation as on 26 Mar’18, with 28 of them having a critical stock level of 7 days.
Coal stock available at power plants had increased 3.87% M-o-M to 16.15 MnT as on 26 Mar’18, but were marked 38% lower on the year compared with 26.17 MnT as on 26 Mar’17.
Market participants had also reported an increase in appetite for high CV Indonesian coal, as the prices were coming down. An Indian trader had shared price of 5000 GAR coal at USD 64/MT, FoB Kalimantan this week, which was reportedly priced at USD 74/MT a month ago. On CFR basis, 5000 GAR coal was heard at USD 73-74/MT.
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