Indonesian thermal coal prices displayed varied trends last week. Prices for low-CV (3400 GAR) remained stable at $34.39/tonne (t), while high-CV (5800 GAR) coal increased by $1.36/t, settling at $91.16/t.
On the supply side, Indonesian miners were on Ramadan holidays, leading to a temporary slowdown in production. Operations have resumed as miners returned. Some Indonesian producers are also attempting to liquidate cargoes, particularly those with a mid-level calorific value, at prices favourable to buyers because they anticipate further price drops in the coming months.
Chinese power plants in the southern region are seeking high calorific value and high-sulphur Indonesian-origin cargoes. One reason for the increase in inquiries from China for Indonesian coal is the rising temperatures in southern China, prompting traders to book cargoes in anticipation of potential price rises. Indonesian prices gained upward momentum last week due to an increase in China’s domestic prices. Some inquiries were seen from Chinese buyers for Indonesian coal, however, they were not converted into deals due to discrepancies between bids and offers.
In India, inquiries from coastal power plants increased due to a surge in power demand. Demand from India is expected to increase in the coming days due to the ongoing summer.
Outlook
Indonesian thermal coal prices are expected to witness an increasing trend in the upcoming weeks. Demand from India is expected to rise due to increasing demand from power plants to meet summer power requirements. Also, rising temperatures in southern China are prompting traders to book cargoes in anticipation of potential price increases. All these factors shall contribute to the rise in Indonesian coal market prices, accompanied by improved buying interest.