ASIA COAL MARKET: Indonesian coal prices continue to slip on lack of demand

Friday, 2 Dec, 2011

Manila (Platts): Indonesian coal prices continued to soften Friday as reports trickle in that that barging is now being allowed at the Mahakam river and Chinese importers are not serious about chasing spot cargoes.

A trader said his Chinese associates are still asking him to offer Indonesian coal in China, but added that he is not trading as he feels that Chinese importers will only buy at prices lower than what they have been offered.

He said he received a Chinese bid for 5,000 kcal/kg GAR Kalimantan coal at $76.50/mt FOB for blended material.

An Indonesian coal producer previously offered to sell at $77/mt FOB.

The producer has not yet responded to the Chinese bid and may likely agree to lower the price, he said.

"I am trying to close something for 5,000 kcal/kg GAR," the trader said, adding that Indonesian coal prices continued to remain soft.

Meanwhile, the supply disruption caused by the November 26 collapse of a public suspension bridge at the Mahakam river failed to give support to Indonesian coal prices, industry sources said.

On Friday, a north Asian buyer said coal-carrying barges have been now allowed to pass through the portion of the Mahakam river where the bridge collapsed.

Separately, Mahakam Sumber Jaya, or MSJ, a unit of Tanito Coal, which declared a force majeure on its December shipments after the bridge collapsed, has lifted the declaration Thursday.

A second trader said there are hardly any buyers for Indonesian cargoes, adding that Kalimantan prices are edging lower.

Another trader said there continued to be very few bids out of China, describing bids by Chinese importers as all over the place.

"The same is true for Indonesian coal price offers," he said.

He added that Indonesian CFR price offers for 4,000 kcal/kg NAR coal for south China delivery were between $65/mt and $82/mt.

Platts assessed Thursday the FOB Kalimantan 5,900 kcal/kg GAR at $98.00/mt, a $0.25/mt decline from a day earlier and FOB Kalimantan 5,000 kcal/kg GAR at $76.00/mt, down $0.25/mt day on day.

(Courtesy sourced Platts)