Indonesian physical coal prices were little changed today, although details began to emerge that a Chinese utility may have awarded a tender for low-calorific value (CV) material at a lower price compared with another utility tender yesterday.
State-owned utility Guodian was today heard to have awarded tenders for several grades of Indonesian coal for its power plants in eastern China's Jiangsu province for delivery from early August to early September. These included a geared Supramax GAR 4,200 kcal/kg (NAR 3,800 kcal/kg) cargo that was heard to have been awarded at a price that nets back to $35/t on a fob basis.
Fellow state-owned Chinese utility Huaneng yesterday awarded August cargoes to several western and Chinese trading firms. Some of its yuan-denominated awards for geared Supramax cargoes of GAR 4,200 kcal/kg coal to Shanghai netted back to roughly $35.35-35.60/t on a fob Indonesia basis, market participants said.
Trade in the Indonesian spot market was slow today and some market participants said prices could begin to come under pressure again, given current weak demand. Prices of GAR 4,200 kcal/kg coal have found some support recently from short-covering by traders that participated in the recent Chinese utility tenders.
Bids for August-loading GAR 4,200 kcal/kg Supramax cargoes were at around $35.35-35.50/t today, with offers at $36.40/t. Bids for September shipments of the same coal were at $35.15/t and offers were at $36.40/t.
Trade in the ICI 4 derivatives market was also slow today, with bids and offers were broadly stable compared with yesterday. July ICI 4 derivatives contracts were bid today at $35.75/t and offered at $36.25/t, while August contracts were bid and offered at the slightly lower prices of $35.40/t and $36/t respectively.
In the Australian market, a 60,000t September-loading cargo of NAR 5,500 kcal/kg coal was sold at $53/t fob Newcastle. The price was up from Argus' most recent price assessment on 5 July at $51.96/t fob Newcastle. There was an unconfirmed bid for an August Capesize vessel at an even higher price.
But the price of NAR 5,500 kcal/kg selling into South Korea was heard to be lower, possibly even below $51.50/t fob Newcastle for August-loading Capesize or Panamax cargoes.
In addition, a smaller 25,000t clip of September-loading NAR 5,500 kcal/kg coal was bid at $53/t fob Newcastle on screen today. The bid was from a western trader planning to use the coal for blending, market participants said.
In the higher-CV market, a 25,000t cargo of NAR 6,000 kcal/kg coal for loading in October was heard to have been bid and offered at $76.45-79/t fob Newcastle, also on screen. A cargo with those specifications traded at $76/t fob Newcastle most recently last week.
Spot thermal coal prices in the China domestic market remained under pressure from weak market fundamentals. Coal consumption at the six major power plants was at 597,400t today, far below 741,800t on the corresponding day of last year.
Trading activity in the Chinese domestic NAR 5,500 kcal/kg market was limited as buyers were more interested in taking NAR 5,000 kcal/kg supply priced at around Yn530/t fob northern ports. Small amounts of NAR 5,500 kcal/kg coal were heard to have traded at Yn608-609/t and most participants expected the market to ease further, citing falling thermal coal futures.
The actively traded September thermal coal futures on the ZCE closed at Yn583.00/t today, down by another Yn3.4/t from yesterday, indicating the market is in backwardation.
Monthly term contract prices for July were settled at Yn599/t. Most participants expected the August term contact prices to be lower, citing ample domestic supply and higher stocks of imported cargoes at coastal ports.News Source: Argus Media