Indonesian low-CV thermal coal prices stable despite weak demand

sxcoal.com Viewpoint,  Price,  Thermal Coal 2022-11-24 17:10:30

Indonesian low-CV thermal coal prices were largely unchanged on November 24 as limited availability offset the gloomy Chinese demand next month.


Chinese utilities have been actively inviting tenders in recent weeks. A state power generator has completed five rounds of invitations this month, with the total volume at 4.2 million tonnes.


The group, which has almost wrapped up bookings for December deliveries, was bearish about the market due to low coal burns and high stocks, a Chinese trader disclosed.


In the latest tender issued on November 22, the generator was said to have bought at least nine cargoes, with 2,800 Kcal/kg NAR coal awarded at a price net back to $51/t FOB, 3,000 Kcal/kg NAR at $61.5/t, 3,400 Kcal/kg NAR at $72/t and 3,800 Kcal/kg NAR at $88/t.


With supports of active tender invitations by Chinese utilities, Indonesian low-CV thermal coal prices picked up since last week. On November 24, December-loading Panamax 3,800 Kcal/kg NAR cargoes were mainly offered at $89/t FOB.


Low-CV prices have increased slightly but the trading activity remains tepid, a Guangdong-based trader said. A Shanxi-based trader reported there are few cargoes of 3,400-3,800 Kcal/kg NAR available in the market.


In comparison, mid- and high-CV prices have spiraled down. Cargoes of 4,700 Kcal/kg NAR reached $120/t FOB.


However, some traders expected the prices to stabilize soon.


"The mid-CV cargoes have been close to the bottom following the recent price declines in tandem with the downward trend in the Chinese domestic market," said a Zhejiang-based trader.


"Now, the price of 4,700 Kcal/kg NAR has dropped close to the level of 3,800 Kcal/kg NAR on a single Kcal basis," he added.


According to current offer prices, the price of 1 Kcal/kg for 4,700 Kcal/kg NAR grade is $0.026/t, close to $0.023/t for 3,800 Kcal/kg NAR grade. This suggests utilities are not necessary to seek low-CV cargoes.


Freight rate for Panamax cargoes stood at around $7/t FOB on the trip from South Kalimantan to South China, while that for Supramax cargoes reached $9/t, traders said.


On November 24, Fenwei assessed Indonesian 3,800 Kcal/kg NAR thermal coal at $97/t CFR South China, up $0.5/t from a day earlier; on a FOB basis, this grade was assessed at $87/t FOB, also a $0.5/t rise on the day.


Indonesian 4,700 Kcal/kg NAR thermal coal were assessed at $123/t CFR, down $2.5/t from a day ago.  


(Writing by Alex Guo  Editing by Tammy Yang)
For any questions, please contact us by inquiry@fwenergy.com or +86-351-7219322.

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