Pockets of demand from China arose due to cold waves in parts of the northern region
In Indonesia the availability of spot cargoes remained limited
Indonesian thermal coal prices have shown an upward trend in the past week. Low-CV (3400 GAR) coal prices increased by $0.31/t to $37.23/t, while high-CV (5800 GAR) prices edged up by $0.88/t to $95.14/t.
On the supply side in Indonesia, incessant rains in some parts, especially the Sumatra region, further weighed on the production and transportation of fuel from certain mines. Moreover, the availability of spot cargoes remained limited. The lower availability of March-loading cargoes is leading miners with cargoes to increase prices.
China again experienced cold waves in parts of the northern region, causing temperatures to drop and prompting slight rise in demand for heat in the country. Consequently, domestic coal prices in China rose. It is anticipated that pockets of demand for Indonesian coal may also rise as Chinese buyers seek cheaper alternatives to domestic coal.
Indian buyers largely remained quiet as power plants were operating with sufficient inventory. Domestic production has continued to effectively meet local demand, with power plants reported to be operating with comfortable levels of coal stocks. India’s robust domestic production has consistently exerted pressure on imported coal price levels.
India: Portside prices increase by INR 150/t
Thermal coal prices for 4200 GAR coal at Kandla Port increased at INR 6,250/t. This uptick in prices can be attributed to improved buying interest.
Outlook
Prices in Indonesia may increase in the coming weeks due to increase in demand from Chinese buyers. Furthermore, demand for Indonesian coal from India is anticipated to surge in the later half of March, coinciding with the full onset of summer. However, there could be some supply constraints from Indonesia due to rainfall in Sumatra and other regions of the country. The increase in demand and supply constraints will contribute to price increase.