Prices for Indonesian thermal coal remained largely unchanged in the wake of weakening demand, despite tight supply from the world's largest exporter.

 

Indonesian miners have prioritized supplies to meet rising domestic needs in recent months, tightening export availability of the fuel. One miner said he would focus on fulfilling domestic market obligations (DMO) in the remainder of this year.

 

Some smelters have launched and are expected to step up coal restocking before coming online next year, market sources noted.

 

Despite bearish sentiment, Indonesian miners have kept export prices steady. Panamax cargoes of 3,800 Kcal/kg NAR coal was currently offered at $58-62/t FOB, and 5,500 Kcal/kg NAR coal was quoted at $97-98/t FOB.

 

Some 4,500 Kcal/kg NAR Panamax shipments for January delivery were offered at a $3 premium to the index, against a bid of $1.5/t.

 

Recent frigid weather and snowfall in China raised concerns on supply shortage. Several utilities have stepped up tender invitations for January delivery.

 

On December 13, a Guangxi-based utility closed a tender for cargoes to be delivered before January 25, with offers received from traders ranging from 544 yuan/t to 605 yuan/t, DDP with VAT, according to market sources, netting back to $58-65/t FOB on a Panamax basis.

 

Another state-owned utility received offers at 555-568 yuan/t as close its tender on the same day.

 

Market views on prices diverged. Some saw optimism in growing index-linked coal deals, with Chinese buyers maintaining interest in high-CV grades, while others said utility tender prices were too low to lift spot prices, especially for mid-CV coal where losses were acute.

 

On December 12, the CCI index for Indonesian 4,700 Kcal/kg NAR thermal coal was at $91.5/t CFR South China and $83.7/t FOB, both flat from a day earlier. The CCI index for Indonesian 3,800 Kcal/kg NAR coal was also assessed stable at $68.0/t CFR and $57.2/t FOB.

 

The CCI index for Australian 5,500 Kcal/kg NAR coal was stable at $111.0/t CFR South China.