Indonesia thermal coal prices have been decreasing since the last four weeks. Low-CV coal prices have fallen from $94/t FOB to $83/t, while high-CV coal prices have dropped from $159/t FOB to $142/t.
The main factor behind the decline in prices is the New Year holidays in China that has resulted in sluggish demand, while European demand remains largely stable.
Demand from South Korea is muted as buyers are seeking alternative options. Traders said they were comparing high-ash Australian coal prices with coal available from Russia.
Temperatures in Japan have also risen leading to bearish sentiments for LNG and coal prices.
India: Portside prices remain stable
Thermal coal prices of 4200 GAR coal at Kandla port have been largely stable m-o-m at INR 8,400/t. Demand from the power, textile and cement sectors remains sluggish.
Indian buyers are not too willing to purchase as domestic coal is cheaper compared to imported Indonesian material, sources informed.
“There is stress selling among traders. 5000 GAR coal is being sold at INR 9,000-9,500/t post negotiations. However, this is yet to be confirmed. Prices are expected to change after China comes back from the New year holidays,” a Gujarat-based trader source said.
Outlook
Indonesian thermal coal prices are expected to remain stable till China returns from the Lunar New Year holidays. India’s portside prices may see some improvement if index prices rise next week, while traders are likely to remain in wait-and-watch mode.
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