Weekly recap: Global coal market trends (Week 51, 2024)

India's coal market remained subdued this week, with limited demand and ample stock availability exerting downward pressure on Indonesian and South African thermal coal prices. Buyers adopted a cautious approach, delaying purchases and awaiting clearer signals on regulatory updates and market stability. Freight rates also declined due to oversupply and low cargo demand, though Indonesian freight bucked the trend with a slight increase. Meanwhile, the domestic met coke market remained stable amid limited trading activity, and imported pet coke prices edged up slightly, reflecting steady market sentiment. Overall, market dynamics reflected weak buyer sentiment, cautious trading, and supply pressures.

Indonesian thermal coal prices under pressure

Portside prices of Indonesian thermal coal in India remained subdued this week as limited demand and ample stock availability reduced trading activity. Prices at key ports were stable, with 3400 GAR coal at INR 4,700/t at Navlakhi and 4200 GAR at INR 5,900/t and INR 5,750/t at Kandla and Vizag, respectively. Meanwhile, 5000 GAR coal offers remained steady at INR 7,900/t at Kandla and INR 7,800/t at Vizag. The coal market remained bearish, with buyers awaiting further price drops amid expectations of regulatory delays affecting Indonesian exports.

South African thermal coal prices drop on high stocks, subdued demand

Portside prices of South African thermal coal in India fell this week, driven by weak demand and increased stock levels. RB2 (5500 NAR) prices dropped by INR 50-100/t to INR 9,350/t, while RB3 (4800 NAR) declined by INR 50/t to INR 7,800/t, ex-Gangavaram, according to BigMint. South Africa's indexed FOB prices also fell w-o-w, with RB3 at $68/t and RB2 at $88/t, both down by $0.50/t. Thermal coal stocks at Indian ports rose by 2.3% w-o-w to 13.29 mnt in week 50, with improved arrivals contributing to the increase. The competitiveness of domestic coal continued to dampen demand for RB3, though limited imports and stock depletion may stabilise prices soon.

Domestic coal prices decline as buyers await clarity on upcoming CIL auctions

India's domestic coal prices saw further declines this week, with 4500 GCV coal assessed at INR 4,900/t, down INR 50/t w-o-w, and 5000 GCV coal at INR 6,200/t, a reduction of INR 200/t, exw-Bilaspur, according to BigMint. Buyers are postponing purchases in anticipation of more price reductions with the upcoming CIL subsidiary auctions.

Domestic met coke prices stable amid low trading activity

This week, India's domestic met coke prices remained steady, with 25-90 mm BF grade assessed at INR 31,300/t exw-Jajpur and INR 28,400/t exw-Gandhidham. Offers were around INR 33,000-34,000/t, but workable levels stood at INR 30,000-31,000/t. Limited trades occurred as the industry awaited updates on quota restrictions from the ministry. The domestic met coke market may face continued pressure due to subdued steel demand and falling Chinese prices, though limited supply in premium imported grades could support prices if demand revives.

Imported pet coke prices increase by $2/t w-o-w

The prices of imported pet coke in India rose by around $2/t w-o-w. CFR prices for the west coast stood at $102-103/t, while the east coast was assessed at $103-104/t, slightly higher than last week's levels of $100-101/t and $102-103/t, respectively. Market activity remained steady, with demand and supply unchanged and buyers maintaining their usual purchase patterns.

Coal vessel freights drop, but Indonesia sees uptick

India's coal freight rates fell this week due to an oversupply of vessels and limited cargo demand, creating downward pressure on prices. Thermal coal stocks at Indian ports increased by 2.3% w-o-w to 13.29 mnt in week 50, supported by improved arrivals. Freight rates for Australia-India routes dropped $0.25/t to $13.1/dmt, while South Africa-India rates declined $0.3/t to $12/t. However, Indonesia-India freights bucked the trend, rising $1.4/t to $11/t amid ongoing negotiations and supportive sentiment in this route.