The rising coal prices in Indonesia has become a cause of concern for India buyers, as market participants were lacking clear direction to make a move.
Indonesian coal prices had maintained stability this week, yet prices had gone up USD 2-3/MT from the previous month owing to firm demand from China and India.
Buyers in India were anticipating Indonesian coal prices to soften in Jan’17, when the winter season in China draws to a close. However, buying from China had continued to remain strong which are supporting the prices. Indonesian coal index had again witnessed growth on the W-o-W basis during the week.
An Indian trader was expecting that buying from China would slow down ahead of the New Year holidays, however, another trader was optimistic that the current prices would sustain buoyed by demand from India.
He commented that “even if buying from China is halted after the beginning of their New Year Holidays, the need to preserve or rebuild inventories at power plants will continue to offer support to the Indonesian coal prices.” Many power utilities have not maintained requisite coal-stocks, he added further.
Recently, Maharashtra state power utility, MAHAGENCO, had floated a tender for the supply of 1 MnT Non-Coking coal of Indonesian origin. According to the data provided by Central Electricity Authority (CEA), the state-run power utility had not imported any coal during the first nine months (Apr’17-Dec’17) of the current fiscal FY18. The company mainly depends on domestic coal supplied by CIL for its operation, but often imports coal for blending purpose.
Current offers for Indonesian 4200 GAR coal was heard at 49/MT, FoB Kalimantan. 3800 GAR coal was offered at USD 39/MT, FoB Kalimantan.
Stock and Sale Market:
A trader based in Gujarat had highlighted that there has been a steady increase in the 5000 GAR coal market, due to the shortage of the material. He had quoted sale offer for this material at INR 5500/MT (exclusive of GST 5% and compensation cess of 400/MT), at East Coast.
4200 GAR coal was offered at INR 4400-4500/MT, at East Coast ports.
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