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Singapore — An uptick in the number of coronavirus cases in Indonesia have stoked concerns on the possibility for various coal consuming regions to implement more stringent checks on ships coming from Kalimantan, sources said Monday.

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China imported 68.1 million mt of coal in the first two months of this year, up 33.3% from 51.1 million mt from the year-ago figure, according to data from the country's General Administration of Customs.

Seaborne thermal coal traders largely attributed the reason for the surge in imports to a domestic production crunch since the COVID-19 outbreak in late January.

A South China-based trader said incoming ships from Indonesia might have to go through Chinese quarantine checks, just like how outgoing Chinese ships faced safety checks earlier last month.

Some ports in southern China have already imposed import restrictions on seaborne coal, and it could worsen if China decides to further quarantine and check on incoming Indonesian ships, said an east China-based source.

Seaborne coal prices might dip further if import checks tighten, he said.

S&P Global Platts assessed the daily 7-45 days forward price of the Indonesian 4,200 kcal/kg GAR –- or 3,800 kcal/kg NAR -– coal at $32/mt FOB Kalimantan Friday, a seven-month low.

An Indonesia-based trader said coal production in Kalimantan should not be affected but news on locking down Jakarta, the capital of Indonesia, may stoke concerns among few on a wider spread of the coronavirus pandemic.

A north India-based trader expressed similar sentiment that it could be worrisome for Indonesian ships entering Indian ports, but did not provide further information.

Another South China-based trader reckoned that the key impact from worsening COVID-19 in Indonesia should be an extension of time for which Indonesian coal cargoes reach the hands of buyers, but should not be a key determinant on the Kalimantan thermal coal prices.

"In China, the coastal utility coal burn has been overall lackluster though some improvements made, and it is clear that seaborne import volumes contributed to growing coastal utility stockpiles. Higher imports in January and February came in despite recently released data showing that power consumption in January and February fell 8.2% year on year. Lackluster fundamentals in seaborne demand is probably more important than COVID-19 to the Indonesian producers," said Matthew Boyle, lead coal analyst from S&P Global Platts Analytics.

On the supply front, producers in Indonesia largely purported that an increase in the number of cases of coronavirus within the country should neither affect the production and mining schedule, nor induce checks on incoming ships by foreign countries.

"There could be more stringent checks should coronavirus cases be confirmed in mining areas, however, no mines have this status yet," said a producer based in East Kalimantan.

"Ports taking in Indonesian coal are usually far from the public area. However, it all depends on each country's policy on preventive measures for this disease," said another producer.

Another trader based in west India said Indonesian ships are not allowed to enter Indian waters and would be quarantined for at least 14 days from their last port of discharge.

He received an issue notice last week that the JNPT port in west India has implemented this restriction and reckoned that the notice will apply to other ports as well in the near term.

Moreover, seaborne demand from India has been very lackluster recently in light of the coronavirus pandemic, he said.