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ICI 4 thermal coal derivatives prices hold steady

Source: Pexels, May 30, 2019

Another 20,000t of June ICI 4 thermal coal derivatives coal contracts were cleared on the CME today at the same price as a June contract that traded at yesterday.


Of today's trades, two 10,000t June clips traded at $36.70/t, both brokered by Singapore-based Evolution. By comparison, a 5,000t June ICI 4 clip traded yesterday at the same price, which was followed by a 10,000t July clip that traded at the lower price of $36.85/t.

June ICI 4 derivatives were bid today at $36.50/t, broadly in line with a June bid yesterday at $36.45/t. June was offered today at $37/t, down from $37.20/t yesterday.

Today's trades mean that 35,000t of ICI 4 contracts have traded so far this week, taking the total volume for May so far to 345,000t and the total volume to have been cleared on the CME since the contract launched last year to 3.67mn t.

Activity in the physical market remained tepid today, largely because of sluggish demand from China and India. Inventories in both countries remain high.

The market is likely to turn significantly quieter next week because of a week-long Indonesian public holiday to mark the end of the Islamic fasting month of Ramadan. Underscoring the current weak demand situation, the week leading up to the annual holiday is typically active as buyers look to secure cargoes before Indonesian businesses close, although that has not happened this year.

In addition, Indian demand is likely to decline even further from next month with the onset of the June-September monsoon season.

In the GAR 4,200 kcal/kg market, bids for June-loading geared Supramax vessels were unchanged from yesterday at around $37/t. But offers edged slightly lower to $37.50/t from around $38/t earlier in the week. Details of transactions were scarce. In the lower-calorific value (CV) GAR 3,400 kcal/kg market, a June-loading Supramax cargo was offered at $22.50/t, unchanged from yesterday.

The Australian thermal coal market remained quiet today on weak demand from main buyer China. Chinese demand for Australian coal fell because of high power plant inventories and lingering concerns about the impact that the China-US trade war will have on the economy.

In the China domestic market, offers of NAR 5,500 kcal/kg coal were at around 608-610 yuan/t ($88-88.30/t) fob northern China ports, while utilities held back on bidding for the coal.

In China's futures market, the September contract on the ZCE closed at Yn581/t today, down by Yn4.80/t from yesterday.


News Source: Argus Media