Strong Buying Keeps Indonesian Coal Offers Firm

Indonesian Steam coal prices are firm and hovering on strong side amid active participation by India and China.

Sudden rise in demand from India and China for Indonesian coal has kept offers on upper side this week. However, supply tightness in Indonesia due to rain affect and sharp rise in South African coal index is driving Indian buyers to more focus on Indonesian coal now.
Indonesian 4200 GAR offers are assessed at USD 27.5-28/MT, FoB Indonesia for current loadings.

Significant rise in domestic consumption is also reflecting as a major factor behind stability in Indonesian prices. Indonesian coal consumption rose by 34.5% Y-o-Y to 24.5 MnT during Jan’16-Apr’16 owing to higher domestic coal demand as the country is striving 35,000 MW power project soon.

Meanwhile, Indonesian 4200 GAR coal is being offered at USD 34/MT at West Coast India ports. High CV Indonesian material 5000 GAR is available at USD 48/MT, CFR East Coast ports.

A source mentioned, “Indonesian coal trade prices have increased as supply tightness seems tough for buyers to get prompt cargo for current bookings. In India, buyers are considering 5000 GAR and 3800 GAR coal more for blending purpose.”

Indonesian low CV material 3600 GAR offers remain unchanged this week at USD 27.5-28/MT, CFR Kandla for Jul’16 loadings.

At the current situation, Indian utilities are ready to purchase more material on given offers as the other coal prices are far costlier than Indonesian grades. Demand for South African grades is falling down and Indian buyers are preferring to import Indonesian grade on comparative cheaper prices.