Indonesian thermal coal portside prices remain stable w-o-w
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The Indonesian thermal coal portside market remained stable this week due to weak demand. Trading activities were sluggish and logistic issues in portside, sources informed BigMint. Specifically, prices of 3400 GAR coal at Navlakhi Port remained stable at INR 5,100/t. At Kandla, the price of 4200 GAR coal held steady at INR 6,200/t ex-port. Meanwhile, prices of 5000 GAR coal at both Vizag and Kandla remained stable throughout the week.
The market for low-CV coal was under pressure due to high stock levels and moderate demand. Suppliers have been reducing their offers to stay competitive amidst a surplus. Despite some transactions occurring, prices of low-CV coal are generally unattractive. Prices of mid- to high-CV coal received support due to limited availability, which constrained supply, and continued interest from market participants.
Factors impacting Indonesian coal prices -
- Index prices decline - Indonesian indexed prices of high-CV (5800 GAR) coal were recorded at $92.73/t, inching down by $0.14/t. Indonesian mid-CV prices (4200 GAR) dropped by $0.54/t to $50.64/t. Meanwhile, the low-CV (3400 GAR) prices declined by $0.42/t to $31.36/t. Prices were on FOB basis.
- Diversion of excess coal stock from Navlakhi port- In India, an oversupply of coal combined with weak market demand has led to logistical challenges, keeping prices under stress. With Navlakhi port operating at full capacity, vessels are being redirected to Kandla port, causing disruptions in the supply chain. This situation is contributing to a price gap across different grades due to decreased movement and increased inventory levels.
- Global market sentiments - In China, domestic coal prices remained stagnant, resulting in subdued market sentiment. Coal-based power consumption has moderated due to increased hydro-power production. The reduced share of coal in China's electricity mix is expected to negatively affect future demand. Additionally, coal stocks at major northern Chinese ports have decreased slightly in response to the overall moderation in coal consumption.
