OfBusiness Coal Dailies | 7th July 2023

Price

• Prices at Navlakhi port of Grade 3600 GAR is Rs 5300/MT ($66), Grade 3800 GAR is Rs 5500/MT ($72), Grade 4800 GAR is Rs 6500/MT ($80), Grade 5200 GAR is Rs 7600/MT ($92) , Grade 5400 GAR is Rs 9000/MT ($110) and at Kandla port of Grade 3600 GAR is Rs 5800/MT ($70), Grade 3800 GAR is Rs 6100/MT ($74), Grade 4600 GAR is Rs 7000/MT ($92), Grade 5200 GAR is Rs 7900/MT ($96), Grade 5600 GAR is Rs 9700/MT ($118).
• Australian coal price at Krishnapatnam port is Rs 12900/MT ($157) and at Gangavaram port is Rs 15200/MT ($185).
• South African RB2 coal price at Ennore port is Rs 9000/MT ($110), at Krishnapatnam port is Rs 9400/MT ($115) and at Gangavaram port is Rs 9400/MT ($115) .

Demand and Supply

• Indonesian thermal coal prices of various grades continued to slide. The bids and offers spread in the Indonesian low-calorie CV have widened amid falling demand. Indonesian coal prices continued to drop on falling Chinese and Indian buying interests. While there are expectations of increased coal demand in July-August due to hot weather, slow economic and industrial activities and sufficient stock at power plants resulted in buyers taking a backseat to purchase. Demand in the Indian market did not see any rebound over the past couple of months due to the onset of the monsoon, which generally weighs on power demand. With the slow growth projected for the third quarter and the huge domestic stockpile, demand is not expected to pick up.

News

• India’s coal production picked up during FY22 and FY23, resulting in improved availability and supply of the dry fuel on account of various government initiatives towards the sector. The production of Coal India grew by 12.1% in FY23; it was the fastest growth rate registered by the state-owned miner in the past few decades. Besides enhancing output and supply, the government implemented multiple reforms to bring greater transparency, ease of doing business, and investment attractiveness to the domestic coal and mining sectors.
• In order to keep pace with the steep jump in domestic coal demand during financial years 2021–22 and 2022–23, when demand increased by 13.4% and 8.5%, respectively, domestic coal production grew by 8.7% and 14.8%.

OFB’s Opinion

• Over the past few weeks, Indonesian thermal coal prices have experienced a notable downward trend, primarily attributed to a decrease in demand. The impending monsoon season is likely to exacerbate this decline, as the subdued buying activity is expected to persist. This combination of factors points towards continued challenges for the Indonesian thermal coal market in the near term.