Jakarta, CNBC Indonesia – World coal prices fell by 12% in trading this week, after last week having strengthened more than 16% to the level of US$ 421/ton and recorded a record high in two months.
Citing data from Refinitiv, on Friday trading (27/5), the price of coal contracted in June on the ICE Newcastle (Australia) market closed at US$ 370.5 per ton. Although the price fell in a week, on a daily basis, coal strengthened by 1.20% and 2.12% respectively in the last two trading days.
Despite the significant increase in the last two days, the price of coal is still far from the level of US$ 400 per tonne touched last week triggered by high demand as India, Japan and European Union countries are moving fast to secure supply.
One of the reasons for the weakening of coal prices this week was profit taking amid last week’s high prices. Meanwhile, ahead of the weekend, coal prices improved due to fears of dwindling supply and high demand from India.
Referring to Montel News, DBX data shows global coal supply in May 2022 will decline by 2.2% (year on year/yoy) to 79.2 million tons. The decline occurred as European countries and Japan accelerated shipments before banning Russian coal exports in August.
Meanwhile, imports from India are believed to continue to increase amid a surge in electricity demand. The use of electricity in Bollywood has skyrocketed since April due to the heat wave. India must also increase coal imports to prepare for the demand which is expected to surge during the rainy season in July-September.
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Photo: Reuters Coal supplying country for India- – |
According to Reuters, India’s coal imports are expected to reach 20.05 million in May this year. This level is the highest since last March.
This increase in imports will benefit a number of countries, especially Indonesia. India is expected to import 11.06 million tons of coal from Indonesia, an increase compared to April’s 8.13 million tons. Coal imports from Australia are estimated to reach 4.3 million tons, down from 4.94 million tons in April.
Coal stockpiles for coal-fired power plants in India reportedly rose 5% this week to 21.8 million tonnes, and are still 20% lower than last year’s position, according to India’s electricity regulator, the Central Electricity Authority (CEA).
“India is looking at imported coal to deal with tight supply from domestic producers,” ANZ Bank wrote in its research report
CNBC INDONESIA RESEARCH TEAM
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