Indonesian thermal coal prices drop w-o-w on dull demand

• Port operations face disruptions amid heavy rains
  
  
• Surplus production keeps prices under pressure
  
  

The Indonesian thermal coal portside market headed south this week amid subdued demand. Trading activities are expected to begin from the end of September due to ongoing weather disruptions and logistical issues at the portside, sources informed BigMint.

Specifically, prices of 3400 GAR coal at the Navlakhi Port dropped by INR 100/t to INR 5,000/t. At Kandla, the price of 4200 GAR coal fell by INR 100/t to INR 6,100/t ex-port. Additionally, prices of 5000 GAR at both Vizag and Kandla declined this week.

In Indonesia, as the monsoon season is about to end, an increase in coal production or available stock, coupled with a decrease in demand, has led to a situation where supply exceeds demand. This oversupply has kept pulling prices down, despite overall improvements in market conditions.

Factors impacting Indonesian thermal coal prices:

• Index prices decline: Indonesian indexed prices of high-CV (5800 GAR) coal were recorded at $92.42/t, inching down by $0.31/t. Indonesian mid-CV prices (4200 GAR) dropped by $0.56/t to $50.08/t. Meanwhile, the low-CV (3400 GAR) prices declined by $0.33/t to $31.03/t. Prices were on an FOB basis.
  
  
• Heavy rain disrupts port operations: In India, portside sentiment was weak due to excessive rains, resulting in stocks being damp and disrupting port operations. Subdued demand for coal kept portside prices under pressure. As per sources, some imports have been scheduled for end-September dates.
  
  
• Global market sentiment: In China, the reduction in stock levels was largely due to lower supply from domestic mines. Furthermore, the limited availability of cargoes at the portside for spot purchase resulted in tight supply and rising domestic coal prices.