Rising Chinese Demand Keeps Indonesian Coal Offers High

Surged Chinese coal demand along with supply tightness of steam coal in the global market grounds to maintain Indonesian coal offers on higher side for near shipments.

Recent uptick in Chinese coal demand has kept Indonesian steam coal offers on higher level this week. Besides, there is noticeable supply tightness in the market, which is prompting Indonesian miners to stick on upside. While, current offers have remained firm at previous level, but Sept’16 and Oct’16 shipments are reflecting with some price addition of USD 1-2/MT.

China is a major driver in the global steam coal market presently. However, Chinese buyers seem more cautioned for near term trade. They are holding back as prices are rising too fast, which is deterring them to match with offers.

Indonesian 4200 GAR, mostly traded in India and China, is available at USD 39.5-30/MT, FoB for Aug’16 loadings; Sep’16 bookings are bit higher at USD 31/MT, FoB. While, 3800 GAR and 5000 GAR material is being offered at USD 23.5/MT and USD 42.5/MT, FoB for Aug’16 loadings.

Indonesian coal offers to India
India, one of the largest destination for Indonesian coal, is quiet slow now on the wake of ongoing monsoon. However, Indian steel and cement industry is also not performing well amid limited demand and undergoing plant maintenance work.

[su_quote]A West Coast based trader mentioned, “There is not such demand seen in the Indian market. While, enough coal stock is lying on the port and currently buyers are preferring to bring material from the stock rather than to book material at high offers.” [/su_quote]

The company is offering 4200 GAR material in Panamax vessel at USD 36/MT, CFR Kandla, which is expected to reach till 25 Aug’16 on port. Also, low CV 3800 GAR coal will be available on port at USD 28/MT, CFR. High CV 5000 GAR material is available at USD 48/MT on the same port.

Presently in India, ready to sale material of 4200 GAR is available at INR 3,200/MT at Kandla Port (all duties and clearance included, VAT & CST will be added further). Meanwhile, 5000 GAR and 3800 GAR coal is being offered at INR 3,850-3,900/MT and INR 2,550-2,600/MT at the same port.