India: Low CV Indonesian portside coal prices inch up as demand picks up

• India govt extends imported coal usage deadline for ICB plants
  
  
• Indonesia sees reduced winter tonnage, keeps prices firm
  
  

Indonesian portside thermal coal prices showed mixed trends this week. Demand for the low-CV variety was high as proved by the import volumes recorded at Navlakhi Port this week.

Prices of the 3400 GAR at Navlakhi increased by INR 250/t to INR 4,800/t. However, at Kandla and Vizag, prices of the 4200 GAR stood stable at INR 5,950/t and INR 5,850/t ex-port respectively. Additionally, prices of the 5000 GAR at Kandla remained flat at INR 7,950/t and, at Vizag Port, the high-CV variety remained stable at INR 7,800/t.

Lower port stocks and improved demand from power plants is rising amid the festive season. Notably, in a significant move aimed at addressing the country's growing energy demands, the Ministry of Power (MoP) has extended the operational directive for imported coal-based (ICB) generating companies until 31 December 2024.

In India, imported coal cargoes are scheduled to arrive this week ahead of the Diwali holidays. Demand from Indian coastal power plants will improve in winter, and inquiries are expected to resume from November.

The Chinese economy is facing mixed signals, post-the stimulus measures for the infrastructure, energy and steel sectors. Coal market participants are cautious and price movements in thermal and coking coal are range-bound due to uncertainty in domestic as well as global markets.

"Sentiments are somewhat confusing. On one hand, China showed some softness in the aftermath of the stimulus measures which did not push up prices along expected lines. At the same time, the Indian power ministry has extended the date for imported coal usage by independent power projects (IPPs) till December 2024. Steel prices in India have been volatile. Hence, offers are intact. Further due to the upcoming rainy season in Indonesia, producers there are anticipating lower tonnage in production and thus not reducing prices," source informed BigMint.

On the supply side, thermal coal offers are higher due to the upcoming rainy season in November, which will limit mining operation and reduce supply. Also, Indonesian miners are expecting demand in India, post-Diwali, to increase due to winter restocking. In addition, coal demand from Chinese buyers were already headed north over the last few weeks.