Indonesian thermal coal prices fell further Thursday, reflecting lower interest from Indian and Chinese buyers in what continues to be a well-supplied market, and rising freight premiums, said traders.
Higher calorific value coals such as 5,000 kcal/kg GAR and 5,900 kcal/kg GAR bore the brunt of the price declines, falling by 25 cents on the day to $54.95/mt and $71.75/mt FOB in Platts assessments, respectively.
This was the lowest assessment for 5,000 kcal/kg GAR Indonesian coal since August 8 and for 5,900 kcal/kg GAR since August 28, Platts data showed.
Traders said a rise in freight differentials in Asia had put further pressure on Australian and Indonesian coals, adding that buyers could afford to wait for better offers in the current market.
Coal prices started to fall globally a little over a year ago as a string of mines came online and with lower demand from emerging economies.
Traders have also said Asia is a well-supplied market in recent months.
Indonesian 5,000 kcal/kg GAR coal has lost $28.05/mt since September 19, 2011, or about a third of its value and 5,900 kcal/kg GAR coal has fallen 28%, or $28.25/mt, over the same period.
The freight rate from the Australian port of Newcastle to China was heard from one trading source to be around $14-15/mt for a Capesize vessel Thursday, up around $2/mt from last week. Panamax freight rates from Indonesia to India's east coast were assessed at $8.80/mt Thursday, up 80 cents from a week ago.
"It is a more favorable climate for Indonesian than Australian because freight has increased and Australia is further away from demand centers," said one broker.
"Buying has picked up this week, but not to the volumes seen in the past...Indian buyers think the price will fall more and it's just a case of who goes in first to pick up a cargo," a trader said.
Offers for 5,000 kcal/kg GAR coal on a geared vessel loading November 10-20 through broker Marex Spectron came to $54.50-55.00/mt in the Asian afternoon, implying lower prices on the day. There were no counter bids.
Meanwhile, 5,900 kcal/kg GAR coal was pegged at $71-72/mt, also showing lower value from Wednesday.
The price of 4,200 kcal/kg GAR coal appeared more stable with a bid at $37.50/mt and an offer at $39/mt but it fell 10 cents in Platts assessments to $38.20/mt in line with the weaker overall market.
"For the low grades, there's demand from India but for the middle grades, no," said one trader. "China is in and out...it's swinging quite a lot."
