Singapore (Platts)--4Oct2012
Indian demand for lower calorific value Indonesian thermal coal has picked up in recent days as evidenced by tight supply of October-loading cargoes, traders said Wednesday.
Cargoes of low-rank thermal coal have been hard to come by, especially between 3,800-4,000 kcal/kg GAR, an Indonesia-based trader said, adding that 3,600 kcal/kg GAR and 4,200 kcal/kg GAR were, however, readily available for loading in October.
A second Indonesia-based trader said a South Kalimantan miner with a monthly production of about 100,000 mt could supply 3,800 kcal/kg GAR coal only in late November or early December as it had placed all its October cargoes.
Although demand from India for Indonesian thermal coal remains strong, Indian buyers are awaiting better deals in the absence of Chinese market players this week even as Indonesian miners are opting to wait and watch, sources said.
"Indian buyers are expecting a correction [for Indonesian thermal prices] in the near term, so not much of buying is happening," an India-based trader source said.
The first Indonesia-based trader source said prices for lower calorific value coal had already hit the bottom, with little room for further price falls, but higher cv coal prices remained under pressure.
"Since the last two to three days, sentiment has worsened and we can expect prices to fall further for higher cv coal," he said.
Currently Indian buying interest for 5,000 kcal/kg GAR coal remains around $55/mt FOB, but "we might be able to get it at $54/mt FOB next week," this trader said.
However, offers from Indonesian miners remained steady at $57-58/mt FOB for 5,000 kcal/kg GAR coal, sources said.
Platts assessed the daily 90-day price of FOB Kalimantan 5,000 kcal/kg GAR at $55.70/mt, unchanged from Wednesday.
Bids and offers for 4,200 kcal/kg GAR coal for loading in the next 7-45 days were also reported stable at $37-38/mt and $40-41/mt FOB, respectively.
Platts assessed the daily FOB Kalimantan 4,200 kcal/kg GAR coal for loading in the next 7-45 days, October 10-November 17, at $39/mt, unchanged on-day.
RETAIL MARKET
The retail market in India for Indonesian thermal coal has picked up this year, especially in Kandla and Mundra ports on the west coast of India and Paradip port on the east coast, a second India-based trader said.
India had imported nearly 25 million mt of coal for retail business in fiscal 2011, while it is expected to touch 40 million mt this year, he said.
With China remaining on the sidelines amid strong hydropower and high stockpiles, Indians are trying to take advantage of a buyer's market, sources said.
The second India-based trader, however, said requirement for coal in India was high currently and he expected some deals to be finalized in the near term.
"Either the seller or the buyer has to kneel soon as there is an urgent requirement of coal [in India]," he said, adding that he expects spot buying to pick up as early as next week.
However, the thermal coal market remains oversupplied, with several US cargoes being offered into Asia-Pacific markets, sources said, with higher calorific value 6,000 kcal/kg GAR US coal being offered into India at $85-87/mt CFR.
"If you are looking at higher cv coal, then there is Australia and Richards Bay [in South Africa] also which are of higher quality compared with Indonesian coal," the first India-based source said.
Offers for Indonesian 5,900 kcal/kg GAR coal were reported between $73 and 75/mt FOB, without corresponding bids on Thursday.
Platts assessed the daily 90-day price of FOB Kalimantan 5,900 kcal/kg GAR at $72.40/mt, unchanged on the day.
--Deepak Kannan,
--Olivier Lejeune,
--Edited by Jonathan Fox,
Indian demand for lower calorific value Indonesian thermal coal has picked up in recent days as evidenced by tight supply of October-loading cargoes, traders said Wednesday.
Cargoes of low-rank thermal coal have been hard to come by, especially between 3,800-4,000 kcal/kg GAR, an Indonesia-based trader said, adding that 3,600 kcal/kg GAR and 4,200 kcal/kg GAR were, however, readily available for loading in October.
A second Indonesia-based trader said a South Kalimantan miner with a monthly production of about 100,000 mt could supply 3,800 kcal/kg GAR coal only in late November or early December as it had placed all its October cargoes.
Although demand from India for Indonesian thermal coal remains strong, Indian buyers are awaiting better deals in the absence of Chinese market players this week even as Indonesian miners are opting to wait and watch, sources said.
"Indian buyers are expecting a correction [for Indonesian thermal prices] in the near term, so not much of buying is happening," an India-based trader source said.
The first Indonesia-based trader source said prices for lower calorific value coal had already hit the bottom, with little room for further price falls, but higher cv coal prices remained under pressure.
"Since the last two to three days, sentiment has worsened and we can expect prices to fall further for higher cv coal," he said.
Currently Indian buying interest for 5,000 kcal/kg GAR coal remains around $55/mt FOB, but "we might be able to get it at $54/mt FOB next week," this trader said.
However, offers from Indonesian miners remained steady at $57-58/mt FOB for 5,000 kcal/kg GAR coal, sources said.
Platts assessed the daily 90-day price of FOB Kalimantan 5,000 kcal/kg GAR at $55.70/mt, unchanged from Wednesday.
Bids and offers for 4,200 kcal/kg GAR coal for loading in the next 7-45 days were also reported stable at $37-38/mt and $40-41/mt FOB, respectively.
Platts assessed the daily FOB Kalimantan 4,200 kcal/kg GAR coal for loading in the next 7-45 days, October 10-November 17, at $39/mt, unchanged on-day.
RETAIL MARKET
The retail market in India for Indonesian thermal coal has picked up this year, especially in Kandla and Mundra ports on the west coast of India and Paradip port on the east coast, a second India-based trader said.
India had imported nearly 25 million mt of coal for retail business in fiscal 2011, while it is expected to touch 40 million mt this year, he said.
With China remaining on the sidelines amid strong hydropower and high stockpiles, Indians are trying to take advantage of a buyer's market, sources said.
The second India-based trader, however, said requirement for coal in India was high currently and he expected some deals to be finalized in the near term.
"Either the seller or the buyer has to kneel soon as there is an urgent requirement of coal [in India]," he said, adding that he expects spot buying to pick up as early as next week.
However, the thermal coal market remains oversupplied, with several US cargoes being offered into Asia-Pacific markets, sources said, with higher calorific value 6,000 kcal/kg GAR US coal being offered into India at $85-87/mt CFR.
"If you are looking at higher cv coal, then there is Australia and Richards Bay [in South Africa] also which are of higher quality compared with Indonesian coal," the first India-based source said.
Offers for Indonesian 5,900 kcal/kg GAR coal were reported between $73 and 75/mt FOB, without corresponding bids on Thursday.
Platts assessed the daily 90-day price of FOB Kalimantan 5,900 kcal/kg GAR at $72.40/mt, unchanged on the day.
--Deepak Kannan,
--Olivier Lejeune,
--Edited by Jonathan Fox,
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