Indonesian thermal coal prices have been decreasing over the last five weeks. Low-calorific value (CV) coal prices have fallen by around $1-2/t to $57/t FOB, while high-CV coal prices have dropped $5/t to $134/t FOB.
Prices have remained largely stable, with the slight drop attributable to a lack of interest on the buyers’ side. As the market started falling, a few buyers reduced their previous order volumes in the hope of further price correction.
Demand from South Korean mills has dropped down due to their increased preference for Russian coal. Chinese mills have increased their dependence on Australian coal after the lifting of unofficial trade ban imposed in CY’20 over several political and public health matters. Also, there are signs of an economic crisis is Pakistan, which is further hurting coal demand.
India: Portside prices remain stable
Thermal coal prices of 4200 GAR coal at Kandla port have been largely stable m-o-m at INR 8,450/t.
Indian buyers inquired for low-CV and mid-CV cargoes; however, no deal was heard to have been concluded amid the wide difference in bids and offers. Also, Indian buyers are preferring more of domestic coal.
Outlook
Indonesian thermal coal offers are expected to remain largely stable or may see a downturn amid falling demand from China and South Korea. Also, with rising alternative options, Indonesian coal offers may remain subdued.
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