India: Portside prices of Indonesian thermal coal under pressure due to limited demand

• Buyer activity low due to sufficient stock at portside
  
  
• Weather disruption, regulatory challenges restrict coal supply
  
  

Indonesian thermal coal prices at Indian ports remained under pressure this week due to subdued demand. In the domestic market, ample stock availability, a lack of urgency to finalize deals, and the upcoming winter holidays slowed trading activities. Additionally, weak demand from major importers, including India and China, further added to the downward pressure on the market.

Notably, thermal coal stocks at Indian ports increased by 2.3% to 13.29 million tonnes (mnt) in week 50 from 13 mnt in week 49, as per BigMint's data. While demand remained stable, improved arrivals contributed to increased stock levels at several ports.

Prices of 3400 GAR coal at Navlakhi Port remained stable w-o-w at INR 4,700/tonne (t). At Kandla and Vizag, 4200 GAR was stable w-o-w at INR 5,900/t and INR 5,750/t respectively. Additionally, 5000 GAR coal offers at Kandla were steady w-o-w at INR 7,900/t, and at Vizag, high-calorific value (CV) coal prices were stable w-o-w at INR 7,800/t.

Price sensitivity, ample stocks keep Indian coal market bearish

Indian buyers maintained a price-sensitive approach, holding off on bids until prices fall within acceptable levels. This contributed to a decline in bids across the Asian thermal coal market, with trading activity slowing amid uncertainty over a price floor. Coal stocks at Indian power plants rose, equivalent to 15 days of consumption, though some plants continue to operate with critically low inventories. Overall, the coal market remains bearish in India, with subdued demand, falling bids, and ample supply outweighing temporary shipment delays.

Potential coal shortage looms

An Indonesian source noted, "Coal shortage is anticipated in the near future due to adverse weather conditions and regulatory challenges. Prices are likely to rise as export quotas are typically concluded at the end of the year, and new quotas often take time to be approved. Additionally, smaller mining operations may face delays of several weeks before receiving the necessary approvals to resume exports."

Indonesian indexed prices of high-CV (5800 GAR) coal were recorded at $91.65/t, down $1.65/t. Mid-CV (4200 GAR) prices decreased by $0.68/t to $50.61/t, and low-CV (3400 GAR) was recorded at $31.20/t, a fall of $0.37/t. All prices are on FOB basis.