Indonesian thermal coal portside prices remain supported w-o-w

Indonesian thermal coal portside prices have remained largely stable in Chinese markets. It showed interest in coal, particularly due to soaring temperatures and rising power consumption. Supply issues and domestic demand in producing countries are also influencing the market.

Prices of the 3400 GAR at Navlakhi Port were stable at INR 5,200/tonne (t). Prices of the 4200 GAR at Kandla stood at INR 6,300/t ex-port. Meanwhile, prices of the 5000 GAR at both Vizag and Kandla ports also remained stable this week.

Indonesian index prices of high-CV (5800 GAR) coal were recorded at $91.7/t, slightly down by $0.57/t. Indonesian mid-CV coal prices (4200 GAR) inched down by $0.44/t to $51.99/t. However, prices of low-CV (3400 GAR) coal inched up by $0.02/t to $32.58/t. Prices are on FOB basis.

In China, surge in coal consumption by power plants with temperatures climbing has led to a hike in enquiries for low to mid-calorific value (CV) coal, to meet this demand, power plants are actively floating tenders.

Indian coastal power plants are in search of mid-CV coal due to rising temperatures in various parts of the country. While there is interest in low-CV cargoes, the bids have been lower, limiting the number of fixed-price deals. Additionally, market participants are awaiting the impact of new infrastructure spending announced in India's budget for April-March 2024-25, hoping it will influence coal demand positively.

On the supply side, Indonesian coal producers are also meeting domestic demand from nickel smelters, which continued to have strong consumption needs. Post heavy rains in Sumatra and central Kalimantan, the mining activities were hampered. However, the situation has improved, leading to an increase in spot cargo availability.

Outlook

It is expected that the thermal coal prices will remain volatile in the near future due to increasing inquiries from China.