Indonesian thermal coal current offers exhibit some stability on grounds of falling demand and persistent over supply in the market.
Indonesian 4200 GAR coal, highly preferred by Indian power producers are being offered at USD 34-35/MT CFR India in Supramax vessel for Oct’15 delivery. Indonesian prices reached their bottom this year and continued a downtrend in early Sept’15. As per weekly assessment, current market is showing a stability on thin buying and 4200 GAR offers are at USD 26/MT FoB Indonesia for Oct’15 shipments.
Meanwhile, other low GCV imported material 3800 GAR and 3600 GAR are being offered at USD 31/MT and USD 29/MT CFR India for Supramax shipments in Oct’15.
At present, Indonesian 4200 GAR imported material is being offered by a trader at INR 2,800-2,900/MT at East Coast ports. The price includes all duties and clearance (VAT/CST will be added further). Whereas, about 25,000 MT ready to sell material of 5500 GAR coal is being offered at Kandla Port at INR 3,700-3,800/MT.
[su_quote]One market participant who, importers coal from its own quarry in Indonesia, commented, “Current trade market is struggling with slowing demand as well as supply glut. Buyer’s enquiries have also fallen as they are not ready to take quick decisions in a highly volatile market. But the market may become stable at current prices.”[/su_quote]
Contrastingly, miners and traders are still optimistic for price recovery in coming months as Indonesian miners have been reducing coal production to achieve equilibrium between supply and demand in the market. During the first eight months (Jan-Aug) in 2015, production declined by15.4% to 263 MnT which was at 311 MnT in 2014 for the same period.
Indonesian Grade Stock and Sale Offers at East Coast Ports:
1. Indonesian 4200 GAR coal is being offered at INR 2,800-2,900/MT at Krishnapatnam Port (all duties and clearance included).
2. Indonesian 3800 GAR (5500 GCV KCAL/Kg) coal is being offered at INR 2,400-2,500/MT at Dhamra and Vizag ports.
3. About 25,000 MT material of 5000 GAR is ready to sell at Kandla at INR 3,700-3,800/MT.
India’s coal import from Indonesia
India’s coal import from Indonesia declined by 17% in Aug’15 to 8.7 MnT against prior month. It is also expected to fall further in Sep’15 and come down to7 MnT.
Indonesia, one of the largest coal suppliers to India, fulfills about 80% of India’s import requirements. It has reduced its coal supply to India in FY16, which had increased by 24% to 142 MnT in FY15.
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