The seaborne thermal coal prices in Asia diverged last week, as increased demand for high-CV coal grades from Japan and South Korea drove a price rally, while lackluster imports from China and India for lower grades curbed rises.

 

Japan and South Korea are the main buyers of index-linked high-CV thermal coal from Australia, the world's second-largest exporter of the fuel.

 

As of December 8, Newcastle thermal coal was priced at $149.4/t, up $19.7/t from the previous week and $28.9/t month on month, according to globalCOAL. This was a new record since the start of October.

 

The gains for the high-grade thermal coal also came as Japanese and South Korean utilities preferred coal to liquefied natural gas in generating additional power demand in winter.

 

Japan, the world's third largest coal importer, is set to import 10.37 million tonnes of thermal coal in December, up strongly from November's 8.53 million tonnes and slightly lower than 11.87 million tonnes in December 2022, showed data from Kpler.

 

South Korea's imports of thermal coal are forecast to reach 8.59 million tonnes in December, the highest since July 2021 and up 13.8% from 7.55 million tonnes in December last year, according to Kpler.

 

In contrast to the strength in demand from Japan and South Korea, demand for imported thermal coal in China and India were muted.

 

China is forecast to see arrivals of 24.82 million tonnes of seaborne thermal coal in December, down from 29.38 million tonnes in November, although arrivals are up from 23.91 million tonnes in December 2022, showed Kpler's data.

 

Chinese buyers showed dull interests in purchasing imported coal since international coastal coal shipping rates have been climbing higher since November, which pushed costs for importing companies and weakened their demand.

 

With elevated stockpiles at ports and utilities, bearishness in seaborne coal prices persisted, despite supports brought by seasonal demand.

 

As of December 8, the CCI import 3800 index for Indonesian 3,800 Kcal/kg NAR coal stood at $68.5/t FOB, down $1/t from the previous week and from the previous month; the CCI import 4700 index stood at $92/t FOB, down $0.5/t week on week.

 

Some importers expected a demand rebound will appear around mid-January as the downstream is about to initiate concentrated replenishment by then for the Chinese Spring Festival holiday starting from February 10.

 

India, the world's second-largest coal buyer, is set to import 14.54 million tonnes of seaborne thermal coal in December, down from 17.42 million tonnes in November and 18.87 million tonnes in October, according to Kpler.

 

The tepid demand in India is the main result of favorable weather in the country, which provided ideal conditions for coal production and diverter more of the fuel to India power plants.

 

Coal stocks at coal-fired power plants in India increased 6.73% from the previous week's 28.28 million tonnes to 30.18 million tonnes as of December 10, enough for 10.8 days' of consumption, higher than 10.1 days a week ago, showed data from Central Electricity Agency.