Sentiment in India following the general elections appears bullish, boding well for the Indonesian thermal coal market, but there is no near-term catalyst being seen to drive Chinese demand up, sources said Friday.
"It would still require a major fundamental correction from the ground to see a significant improvement in Indian demand following the formation of the new government and it will take some time for changes to happen, but the sentiment is good and there is hope," a Singapore-based trader said.
A low cv Indonesian coal producer said that Indian demand has been more stable compared with China, which has been weighed down by lower domestic prices.
"Once the local prices drop, Chinese buyers switch to domestic coal," he said.
A second Singapore-based trader reported a deal for a gearless Panamax cargo of blended 5,000 kcal/kg GAR for June loading sold to China at $54.50/mt FOB.
A third Singapore-based trader said that there is some strong buying interest from China for 3,800 kcal/kg NAR -- or 4,200 kcal/kg GAR -- which is mostly used for blending purposes.
"I am not sure how long this strong interest will continue," he said.
A June-loading Panamax cargo of 4,200 kcal/kg GAR was offered at $38.50/mt FOB while bid is at $38.25/mt FOB, he said.
A Panamax cargo of 5,000 kcal/kg GAR is being offered at $56/mt FOB for June loading, while buying interest is at $55/mt FOB, he added.
A fourth Singapore-based trader said that he had a firm bid from a Chinese buyer for a Capesize cargo of 4,200 kcal/kg GAR coal at $38.25/mt FOB for June loading, but he was unable to procure a cargo at this level.
"Even if I had got a cargo at $38/mt FOB, I would have worked with just a 25 cent margin," he said, adding that a cargo was being offered at $38.60/mt FOB for gearless loading but the South Kalimantan supplier was unable to load Capesize vessels.
A Hong Kong-based trader said that Indonesian suppliers were offering 3,800 kcal/kg NAR at $37/mt FOB for geared vessel loading and at $38.50/mt FOB for gearless loading.
"However, I think $36.50/mt FOB is reasonable [for geared vessel loading]," the trader said, adding that acceptable delivered prices for this grade was at below $45/mt CFR China.
The trader estimated Supramax freight rates from South Kalimantan to Shanghai to be about $10-11/mt.
A second low cv Indonesian producer said that he was not willing to lower offer prices and was focusing more on supplying domestically instead as it was getting difficult to export in an oversupplied market.
A 55,000 mt cargo of 5,200 kcal/kg NAR coal with 0.8% sulfur was being offered through broker Marex Spectron at $60/mt FOB for mid-to-late June loading from South Kalimantan.
Three 70,000 mt cargoes of 6,200 kcal/kg GAR coal with 0.8% sulfur were being offered at $72.70/mt FOB with one for June-loading and the other two for July loading from South Kalimantan, as heard through the same broker.
An Indonesia-based trader placed the fair market value of 5,900 kcal/kg GAR at $68-69/mt FOB, although no firm bids or offers were heard.
Platts assessed the price of FOB Kalimantan 4,200 kcal/kg GAR coal at $37.50/mt, up by 20 cents from Thursday, and FOB Kalimantan 3,800 kcal/kg GAR at $31.50/mt, unchanged on the day.
Platts assessed the daily 90-day prices for FOB Kalimantan 5,000 kcal/kg GAR coal at $55.75/mt, down by 25 cents on the day and FOB Kalimantan 5,900 kcal/kg GAR coal at $67.25/mt, up by 25 cents from Thursday.
