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Bids, offers for low-CV Indonesian coal edge higher

Source: platts, September 5, 2019

There were further signs that the low-calorific value (CV) Indonesian market may be starting to edge higher, with sellers raising their offer prices amid an increase in buyers' enquiries.

The emergence of a relatively large Chinese utility for low- to mid-CV coal may have also encouraged some sellers to raise their offer prices. A number of Indonesian producers are focusing on increasing sales to the domestic market to take advantage of a price premium following the recent drop in seaborne prices.

Chinese state-controlled utility Huaneng has issued a tender to buy 590,000t of imported thermal coal for delivery to its coastal power plants in October, which is normally the shoulder season for power demand.

The utility is seeking coal with a CV in a NAR 3,800-5,500 kcal/kg range. It did not specify an origin for most of the cargoes but they most will likely be from Indonesia or Russia. Huaneng will accept submissions between 6pm Beijing time (10:00 GMT) on 3 September to 10am Beijing time on 6 September.

The spot GAR 4,200 kcal/kg market saw a September-loading geared supramax cargo trade at $31.80/t, while another September-loading shipment possibly traded at the slightly lower price of $31.40/t. These cargoes fall outside the current 60-day October and November-loading window for inclusion in the Argus index. Bids for September-loading GAR 4,200 kcal/kg cargoes were at $31-31.50/t, up from yesterday's $30-31/t range. Offers increased to around $32-33/t, up from $31.50-32/t yesterday.

Trade in the ICI 4 derivatives market was quiet. September contracts were bid at $31.60-32/t with different Singapore brokers and offered at $32.30/t. The last Argus settlement price for September ICI 4 contracts was at $31.40/t on 30 August. October ICI 4 contracts were bid at $31.70-31.75/t and offered at $32-32.10/t, up from yesterday's Argus settlement price for October ICI 4 futures at $31.40/t.

The Australian market saw an international trading selling three cargoes of NAR 5,500 kcal/kg coal into India at $45.50/t fob for loading during September-November. The port of origin was not immediately clear. But at least some, if not all of these shipments, are possibly Australian material.

China's domestic coal prices were little changed from yesterday. Bids for domestic NAR 5,500 kcal/kg coal were around 575-580 yuan/t fob north China ports, while offers were around Yn580/t.

China's futures market saw the September contract on the Zhengzhou commodities exchange close at Yn571.20/t, down by Yn2.60/t from yesterday. The main November contract closed at Yn590.20/t, up by Yn6/t from yesterday.

News Source: Argus Media