Indonesian Thermal Coal Prices at an All Time Low

Indonesian thermal coal offers reached their all time low last week; declined about 8-9% in Sept’15.

Indonesian thermal coal offers reached their bottom this year and still continue a downtrend in Sept’15. As per weekly assessment, prices have again seen a marginal decline in this week and currently Indonesian 4200 GAR is assessed at USD 35-36/MT CFR East Coast Indian ports in Supramax vessel for Oct’15 shipments.

Meanwhile, other imported Indonesian 3800 GAR is being offered at USD 32-33/MT, CFR India for Supramax shipments in Oct’15.

Slowdowns in global consumption, sluggish Indian demand owing to currency devaluation, and immense supply glut have weighed down coal prices.

It is also expected that thermal coal prices may dive deeper by about 10-11% in coming months as Indonesian coal miners and traders are under pressure to cut prices frequently.

At present, about 50,000 MT imported material of Indonesian 4200 GAR coal is being offered by a trader at INR 2800-2900/MT at Vizag Port. The price includes all duties and clearance (VAT/CST will be added further).

Indonesian Grade Stock and Sale Offers at East Coast Ports:

1.Indonesian 4200 GAR coal, highly preferred by Indian power plants, is being offered at INR 2800-2900/MT at Vizag and Krishnapatnam ports (all duties and clearance included).
2.Indonesian 3800 GAR (5500 GCV KCAL/Kg) coal is being offered at INR 2,400-2,500/MT at Dhamra and Vizag ports.

Indonesian Coal production

Indonesia, the world’s largest thermal coal exporter, has cut its coal production and exports in this year to achieve equilibrium between supply and demand in the market. Indonesia’s coal production declined by 15.4% to 263MnT during the period of Jan’15-Aug’15, which was about 311 MnT in last year. On the other side coal exports have also declined by 18% during the period.

India’s coal import from Indonesia

India’s coal import from Indonesia has also declined by 17% in Aug’15 to 8.7 MnT against last month.

Indonesia, one of the largest coal suppliers to India, fulfills about 80% of India’s import requirements. It has reduced its coal supply to India in FY16, which had increased by 24% to 142 MnT in FY15.

Quantity in MnT
Source: SteelMint