India: Indonesian thermal coal portside prices remain weak on bid-offer disparities

• Portside prices stable w-o-w, marginal correction seen in Vizag
  
  
• Asian thermal coal market sees limited trades on bid-offer gap
  
  

Indonesian thermal coal portside trade activities in India have remained weak this week. Prices of 3400 GAR coal at Navlakhi Port stood stable at INR 5,150/t, while 4200 GAR at Kandla Port was priced at INR 6300/t. However, prices at Vizag port inched down by INR 50/t w-o-w.

Prices of high-CV (5800 GAR) coal were recorded at $94.66/tonne (t), down by $1.35/t. Indonesian mid-CV coal prices (4200 GAR) decreased by $0.28/t to $54.27/t. Meanwhile, prices of low-CV (3400 GAR) coal decreased by $0.41/t to $34.03/t. Prices are on FOB basis.

The Asian thermal coal market experienced limited fixed trades on 19 June due to a significant gap between offers and bids. The market is characterised by ample stock levels in major consuming nations and supply constraints in Indonesia, which have affected some miners' operations. The overall supply remained affected on rains in Indonesia. However, diminishing demand inhibited prices from rising.

In India, power plants showed consistent demand with some interest in low-calorific coal. Eastern coastal plants might seek low-CV coal, while western coastal plants have multiple sourcing options. Indian industries are turning to cheaper alternatives from Colombia and Russia, with rising enquiries for Australian cargoes.

In China, domestic coal prices are declining, limiting the number of fixed-price trades in the spot market. On the weather condition, continuous rain and flooding in southern China have reduced demand from both power and industrial sectors. Coal stocks are available at major ports in higher levels. Besides, increased hydro electricity generation in China kept coal demand limited in the country.

On the supply side, small and mid-sized miners in South Kalimantan and Sumatra are experiencing operational challenges due to untimely rains, which are impacting their operations. Despite these issues, larger miners remained unaffected, which has prevented significant increases in coal prices.

Outlook

Indonesian coal prices are expected to remain under pressure with limited fixed trades due to a wide offer-bid gap, high stock levels, and operational challenges faced by smaller Indonesian miners. Demand fluctuations in China and India, influenced by weather and sourcing strategies, continue to shape market dynamics.