en.Wedoany.com Reported - The Asian thermal coal trade landscape is being influenced by two distinct arbitrage logics. Russian coal continues to remain competitive among import sources, leveraging its significant freight advantage to the Northeast Asian market, particularly China. For 5,500 kcal/kg NAR coal shipped from Russian Pacific ports, the freight cost is approximately $10 per tonne, far lower than the $14-$16 from Indonesia, $18-$20 from Australia, over $25 from South Africa, and over $30 from Colombia. Brent crude oil prices holding above $110 per barrel further amplify this logistical disparity. Chinese buyers are also actively locking in ultra-low calorific value resources, with FOB offers for 3,400 kcal/kg NAR coal from Kalimantan ranging between $37.05 and $42.45, depending on vessel type and laycan.
Coal inventories at ports around China's Bohai Rim are lower than the same period in previous years. Data shows total stockpiles in the Bohai Bay area have fallen to 16.7 million tonnes, a year-on-year decrease of 17%; among these, Qinhuangdao Port holds 5.7 million tonnes, Caofeidian Port holds 5.5 million tonnes, and Jingtang Port holds 3.3 million tonnes, representing year-on-year declines of 21.4%, 10.6%, and 30.6% respectively. On the downstream consumption side, on May 4, the daily coal burn of six major coastal thermal power plants was 746,000 tonnes, a slight week-on-week decrease of 0.6% and a year-on-year drop of 1%. Power plant coal stocks stood at 12.6 million tonnes, still 10% lower than the same period last year.
In the Indian market, Indonesian thermal coal continues to offer the most competitive landed cost on both the east and west coasts. The unit energy cost for 4,200 kcal/kg NAR coal is almost on par with higher calorific value grades, giving buyers greater flexibility in fuel selection. For June-loading Panamax cargoes of 4,200 kcal/kg NAR coal from Kalimantan, buyer bids are around $63/tonne, while seller offers are at $65/tonne. Over the past five days, Indonesia's average daily thermal coal exports reached 1 million tonnes, a sequential decline of 8.8% and significantly below the 2025 daily average of 1.31 million tonnes. The supply side is tightening, with several miners having essentially sold out their June and July cargoes to prioritize fulfilling Domestic Market Obligations, with available laycans starting to shift to September.
Coal inventories at Indian power plants are generally ample, reaching 53.84 million tonnes on May 4, sufficient for over 17 days of consumption. However, affected by peak summer electricity demand, 8 domestic coal-fired plants and 8 imported coal-fired plants remain at critical stock levels. From a driving factor perspective, the high oil price environment allows Russia and Indonesia, with their freight cost advantages due to proximity to consumption hubs, to continue dominating their respective key markets. Indonesian coal supply is tightening due to miners prioritizing domestic obligations, uncertainties over production quotas, and strengthening regional demand for mid-to-high CV coal, with limited prompt cargo availability supporting FOB price sentiment.
Looking ahead, China's import demand is still inclined towards Russian and Indonesian resources; Australian coal may only regain its advantage if domestic Chinese coal prices surge or Australian FOB offers are significantly reduced. The choice for Indian end-users varies by consumer: the cement industry can flexibly use 4,200 kcal/kg NAR coal, while sponge iron and inland users prefer higher calorific value grades. If tensions in the Strait of Hormuz affect LNG exports, it could prompt increased coal consumption in parts of Asia, further tightening the seaborne market. In the short term, factors such as post-holiday restocking in China, steady Indian demand, tightening Indonesian supply, and a recovery in reference prices are expected to collectively support thermal coal FOB prices.
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