Chinese Price Discounting Influenced the Indonesian Coal Market Trading

Bearish sentiment blanketed the Indonesian thermal coal market Wednesday amid reports of price discounting by major Chinese coal producers to their domestic customers, said traders. A medium-sized Indonesian coal producer said he expected Kalimantan thermal coal spot prices to soften following the announcement of the Chinese price discounts, in some cases amounting to Yuan 20/mt on domestic coal.

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Price-discounting was expected to translate into lower Chinese bids for Indonesian thermal coal in the weeks ahead Water well drilling machine, said a second medium-sized coal producer in Indonesia. Buyers in China and India were still bidding for Indonesian coals, but negotiations have slowed to a very pedestrian pace because of a gap in buyers' and sellers' price expectations, he said. The second coal producer said he was close to finalizing a deal for coal from a single mine in East Kalimantan at $65/mt GAR on a gearless.

Another deal in India involved 3,800 kcal/kg GAR South Kalimantan coal from a single mine on a geared Handymax vessel at $32.50/mt FOB for March loading. A Singapore-based market source said Indonesian coal prices would continue to trade in a range-bound fashion because of the price discounting in China. The third Indonesian coal producer said he believed the Chinese price-discounting will be short-lived.