In the past week, Indonesian thermal coal prices exhibited a mixed pattern. Prices for low-CV (3400 GAR) coal experienced a slight increase of $0.29/t, reaching $37.40/t, while high-CV (5800 GAR) coal witnessed a marginal decline of $0.10/t, settling at $92.93/t.
On the supply front, Indonesian miners awaiting government approval for their production quotas face uncertainty, potentially leading to a supply gap. Approval from the mining authority is crucial for miners to operate smoothly and maintain production levels for the current and next two years.
Despite the Chinese Lunar holidays dampening demand in China, there is still some activity with buyers engaging in deals based on index-linked prices. Chinese demand is primarily focused on mid-CV grades, and fixed prices are prevalent in these trades.
In India, the robust growth in domestic production limits the surge in demand for seaborne coal. Major power plants in India prefer domestic purchases, contributing to a restrained appetite for imported coal. The consistent high level of domestic production continues to impact and stabilize imported coal prices.
India: Portside prices largely stable w-o-w
India’s portside prices for 4200 GAR coal at Kandla Port remained largely stable w-ow at INR 6,100/t.
Outlook
Looking ahead, Indonesian thermal coal prices are anticipated to decrease as approved production quotas are expected to flood the market in the coming weeks. This surge in supply, combined with subdued demand from China, may lead to an oversupply situation and influence market dynamics.
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