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Few deals for Indonesian coal cargoes as licensing uncertainty clouds market

Limited activity for Indonesian thermal coal cargoes was heard Tuesday owing to uncertainty over the status of some shipments as Jakarta's new licensing system for exports took effect, sources in the market said.

An Indonesia-based trader said some shipments had not yet been loaded because of the new export regulation that took effect October 1.

"I think more chaos will happen in a week when demurrage occurs," he added.

A second Indonesian-based trader said his one-week extension period for cargo loadings had ended last week, and he was trying to expedite his export license process. He noted other exporters were in a similar position currently.

Meanwhile, a Singapore-based trader said "demand is key" amid expectations of a marginal increase in spot prices for Indonesian coal caused by the new export regulation.

So far, only 115 mining and trading companies have been issued with export licenses, he said.

Chinese demand has been quiet given the holidays in China, while Indian demand has been hampered by constraints in port and rail infrastructure.

"The market is largely bearish at the moment. The port condition is poor at the moment which is deterring demand in India," said an India-based trader.

The second Indonesian-based trader had received inquiries both from India and China, but buying interest was at $50/mt or below on a geared vessel basis for November loading, Panamax cargoes of 5,000 kcal/kg GAR at $51/mt FOB.

The first Indonesia-based trader said an October-loading Panamax cargo of 5,000 kcal/kg GAR was offered at $50.50/mt FOB.

"I think the market can only absorb at $49/mt FOB or below," the trader said. He bought a Panamax of 4,800 kcal/kg NAR for October loading at $51.50/mt FOB.

The India-based trader heard an end-October loading Panamax cargo of 5,000 kcal/kg GAR coal sold at $51.75/mt FOB.

Offers for October-loading Panamax cargoes of branded 5,000 kcal/kg GAR The first Indonesia-based trader received an inquiry for a high sulfur and high ash Panamax cargo of 5,800 kcal/kg GAR coal at $56-57/mt FOB from Thailand, but said "that was too low."

LOW CV MARKET RANGE BOUND

Low CV coal prices were largely rangebound over the day, sources said. Offers for October-loading Supramax cargoes of branded 4,200 kcal/kg GAR coal at 37/mt FOB, otherwise at $36/mt FOB, said the second India-based trader said.

"There is demand for 4,200 kcal/kg GAR coal from India," he added.

The first Indonesia-based trader noted that he had not seen much effect on prices yet for the low grade coal, adding a gearless vessel cargo of 4,200 kcal/kg GAR for October loading was being offered at around $37/mt FOB.

A second Singapore-based trader was offered October-loading Supramax cargoes of 4,200 kcal/kg GAR coal at $36.50/mt FOB, while offers for Panamax cargoes were at $38.25/mt FOB.

The first India-based trader felt that demand should pick up in late October.

Buying for 3,800 kcal/kg GAR has been limited, the second India-based trader said adding that Indian buying interest for October-loading Supramax cargoes was at $28-29.50/mt FOB.

Platts price assessments for Indonesian thermal coal were steady Tuesday except for the 4,200 GAR assessment, which fell 10 cents to $36.40/mt FOB Kalimantan.

Source: Platts