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High rainfall slows Indonesian coal exports

Coal News - Published on Thu, 12 Jul 2018

Image Source: Coal Power Steel
Economic Times reported that wetter than normal weather in recent months has slowed coal shipments from one of the main producing regions in Indonesia, the world's top thermal coal exporter, according to weather data, brokers and analysts, supporting prices of the fuel. Thomson Reuters Eikon data shows the cumulative rainfall in the province of South Kalimantan this year was 37% higher than average as of July 10, and 27 % more than average in East Kalimantan.

Queues of dry bulk vessels in those two provinces were also higher than average, after rains turned hauling roads into mud, disrupting coal loading, according to Eikon shipping data.

A Singapore based shipping broker said that "It's been fairly slow in the last couple of weeks," referring to Indonesian coal exports, adding there were "literally no cargoes moving out of Indonesia" last week. He said that "We know that there are pretty decent queues and pretty limited activity out of there." But conditions had now begun to improve with shipments to south and central China.

Slower Indonesian exports along with robust demand from China, where hot weather has increased power usage, and increased imports by India, South Korea and Japan, thermal coal prices in Asia hit six-year highs last month.

A spokesman for Indonesia's biggest coal miner Bumi Resources, Dileep Srivastava, said rains were "heavier than usual over May and most of June" and there "could be some vessel slippages."

The weather in those areas was "still wet but drier conditions (are) now apparent," he said.

But Bumi, which has mines in South and East Kalimantan was still targeting output of 90 million tonnes for 2018, Mr Srivastava said.

Coal production at Indonesia's second-biggest producer by volume, Adaro Energy, had been affected by wet weather this year, but these were largely anticipated and were "still manageable", spokeswoman Febriati Nadira told Reuters.

Mr Nadira said that Adaro was still optimistic of achieving its annual production goal of 54 to 56 million tonnes.

Mr Keith Whitchurch, head of mining engineering consultancy SMG in Jakarta, referring to East Kalimantan said that "The first week in July was really wet.”

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Posted By : Joykumar Irom on Thu, 12 Jul 2018
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