Indonesian thermal coal prices have changed but slightly over the last week. Low-calorific value (CV) coal prices remained unchanged, while high-CV coal prices dropped by around $4/t. Supplies in Indonesia tightened ahead of Ramadan which began on 22 March, 2023. Also, incessant rainfall in the east and south of Kalimantan have affected coal output.
Most Asian countries such as India and China are heading towards procurement of low-CV Indonesian coal. China and India account for about 50% of total Indonesian exports. Hence a change in Indian and Chinese procurement will result in a change in Indonesian prices and exports.
China is not showing up in the seaborne market amidst sufficient domestic production and competitive prices. Chinese mills have floated inquiries for low-CV coal. However, high-CV prices have shown a decline.
China will continue to implement zero tariffs on coal imports till the end of CY23 (Dec’23). The nation’s coal imports in the first two months of the year rose by 71% as purchases of thermal coal at relatively lower prices from Indonesia and Mongolia increased. China will also cut some taxes for small companies and individual businesses.
The number of Indian market inquiries has remained less than what is usually seen during this period of the year for stockpiling for peak summer 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 8,400/t.
Indonesia’s thermal coal exports increased by 15% m-o-m to 28.14 million tonne (mnt) in February 2023 as against 24.43 mnt in January, CoalMint data showed. China was the largest importer of Indonesian coal at 8.48 mnt in February, up 21% as against 7.02 mnt in January.
Outlook
Indonesian thermal coal output is not expected to pick up very soon, at least till the end of Ramadan. After this, output may witness a rise. With Chinese demand and procurement not recovering amid removal of import tariff, Indonesian prices are yet to witness any remarkable change.
Leave a Reply