India: Portside Indonesian thermal coal prices rise on global cues, currency depreciation

• Indonesia lifts HBA index across all grades for rest of May'26
  
  
• Tight spot cargo supply, surging freights support price rise
  
  

Indian portside prices of Indonesian-origin thermal coal increased sharply by INR 100-400/t w-o-w as of 15 May 2026 across major calorific value (CV) grades.

The upward movement was primarily driven by the continued depreciation of the Indian rupee against the US dollar, with the exchange rate hovering near historic lows of around INR 96/USD. The weaker currency significantly inflated import parity costs for Indian buyers, even as international coal benchmarks and freights continued to strengthen.

Among the major grades, high-grade 5,000 GAR coal prices remained stable w-o-w at INR 10,300/t at Kandla and INR 10,200/t at Visakhapatnam. Mid-grade 4,200 GAR coal prices also moved upward by around INR 50/t to INR 8,000/t at Kandla and INR 7,900/t at Visakhapatnam. Lower-grade 3,400 GAR coal witnessed comparatively stronger gains of around INR 250/t to nearly INR 6,100/t at Navlakhi. Tight spot cargo availability, improving regional demand, and stronger freight costs supported the increase in lower-CV coal prices.

Market participants indicated that the recent price increase was largely sentiment-driven and linked to expectations of tighter prompt availability rather than a significant improvement in Indian demand. Despite the rise in prices, many buyers remained reluctant to absorb higher replacement costs due to subdued downstream industrial margins and comfortable domestic coal availability.

Freight hikes, Chinese demand tighten market sentiment

Freights emerged as another major supportive factor for portside prices. Supramax freights from East Kalimantan to Navlakhi increased sharply by around $2.1/t w-o-w to nearly $21.5/t, elevating landed costs for Indian importers. Rising bunker fuel prices and expectations of higher inland logistics costs during the upcoming monsoon season also contributed to the bullish freight outlook.

Additionally, market participants highlighted that a revival in Chinese buying interest and sustained procurement from Vietnam led to the diversion of vessels away from India, tightening spot cargo availability in the Indonesian market. This development strengthened seller confidence and supported seaborne coal prices across multiple grades.

The anticipated closure or operational slowdown at several Indian minor ports during the monsoon period is also expected to affect cargo movement and evacuation efficiency, potentially adding further logistical pressure in the coming weeks.

Port inventories continue to rise despite weak demand

India's non-coking coal inventories at major ports increased by 4.8% w-o-w during week 19, reaching 15.87 mnt compared to 15.14 mnt in week 18. Inventory levels are now at their highest point in nearly 25 weeks, reflecting continued cargo arrivals despite relatively muted downstream demand conditions.

Higher stock accumulation across western and eastern ports was attributed to sustained imports, moderate cargo evacuation, and cautious industrial procurement activity. Buyers largely continued adopting a hand-to-mouth purchasing strategy amid ample supply availability and uncertainty regarding the sustainability of current price levels.

The elevated inventory position suggests that while import costs are rising, physical availability within India remains comfortable in the near term.

Thermal power plant stocks remain comfortable overall

Coal inventories at Indian thermal power plants stood at around 53 mnt as of 14 May, equivalent to nearly 17 days of consumption, indicating an overall adequate supply situation for the power sector.

However, inventory distribution remained uneven across regions and plant categories. Nearly 24 thermal plants continued operating at critical stock levels, including facilities dependent on domestic coal, imported coal, and washery rejects. This reflects persistent logistical and supply-chain imbalances despite healthy aggregate stock availability at the national level.

International market strength supports bullish undertones

International thermal coal markets continued to display firm undertones during the week, supported by stronger Asian demand and tightening Indonesian spot availability.

Among benchmark grades, 5,800 GAR coal prices surged sharply by around $6-7/t w-o-w, while 4,200 GAR coal prices increased by approximately $0.5-1/t. Lower-grade 3,400 GAR coal prices also strengthened by around $1-2/t.

Further supporting sentiment, Indonesias Harga Batubara Acuan (HBA) benchmarks for the second half of May 2026 increased across all calorific value segments. The increase reflected sustained procurement activity from utilities and industrial consumers across Asia, tightening prompt availability, and preparations for peak summer power demand.

The broader seaborne market remains supported by concerns over fuel affordability, intermittent supply tightness, and improving regional consumption patterns across emerging Asian economies.

Outlook

Indian portside thermal coal prices are expected to remain firm, supported by higher freight rates, rupee weakness, and tighter Indonesian supply. However, ample domestic availability and elevated port inventories may limit further price gains.