Indonesian thermal coal prices edged up on Tuesday as industry sources reported a small rise in buying interest from India even as a few Chinese buyers were heard coming forth with raised bids for higher calorific value cargoes since returning from a week-long holiday.
A Supramax cargo of Indonesian 5,000 kcal/kg GAR thermal coal was sold late last week to an Indian end-user at $57/mt FOB by an East Kalimantan supplier for loading in October, said an Indonesia-based trader, who was involved in the deal.
"There were some extra cargoes available with the supplier and so I was able to get a cargo at short notice," he said, adding that the branded, low-sulfur coal was from a single mine, which commanded a slight premium.
But a Singapore-based trader termed the deal "very expensive", saying Indonesian suppliers were offering single-mine, Supramax cargo of 5,000 kcal/kg GAR coal at $56/mt FOB for prompt loading.
"That's the coal market. Not everything is reasonable, always some unreasonable thing happens," he said, referring to the reported deal, adding that Chinese buying interest for such material still remained at $54/mt FOB.
Indian demand for Indonesian thermal coal has picked up in recent days, going by the supply tightness for October tonnage especially for some lower calorific value products, a second Indonesia-based trader said.
"Few deals are happening with Indian buyers a dollar above or below current prices, it's not very surprising," he said, pegging the fair value of 5,000 kcal/kg GAR coal at between $56 and $57/mt FOB.
Platts assessed the daily 90-day price of FOB Kalimantan 5,000 kcal/kg GAR coal at $56/mt, up 50 cents on-day.
RAISED BIDS
Some Chinese buyers were also heard bidding for Indonesian 5,500 kcal/kg NAR coal at $79.50/mt CFR south China for end-October or early November loading, a second Singapore-based trader said, estimating the Panamax freight rate from South Kalimantan to South China at about $8/mt.
"Bids from Chinese buyers [for Indonesian 5,500 kcal/kg NAR coal] have improved from $67/mt FOB a month ago," the first Indonesia-based trader said.
However, concerns about the quality still remains for Indonesian higher calorific value coal, this source said.
"I would be a buyer of low cv and mid cv coal from anyone in Indonesia but for higher cv I would prefer to buy from major Indonesian producers as they are reliable, but they won't sell cheap," he added.
A third Indonesia-based trader said offers from a major producer of 5,900 kcal/kg GAR coal was at $73/mt FOB for November-loading cargoes but no corresponding bids were immediately available.
Sources at major Indonesian producers said they were unwilling to lower prices and were instead prepared to either stock up or reduce production.
"My feeling is that Indian buyers thought that prices will go down further but we will not reduce prices anymore," a source at a major Indonesian coal producer said.
Platts assessed the daily 90-day price of FOB Kalimantan 5,900 kcal/kg GAR coal at $72.50/mt, up 40 cents on-day.
However, reported bids and offers for 4,200 kcal/kg GAR remained stable on Tuesday.
Platts assessed the daily price of FOB Kalimantan 4,200 kcal/kg GAR coal for loading in the next 7-45 days, October 15-November 22, at $39.10/mt, up 10 cents from Monday, based on the reported rise in demand from India for lower cv material.
