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Indonesian thermal coal prices hold steady

Source: Indonesia Investments, April 17, 2019

Indonesian thermal coal prices were little changed today, with most participants holding back from the market to wait for results of a Chinese utility tender.

Trade has also been dampened to some extent by a public holiday in Indonesia for the country's presidential elections tomorrow as well as a public holiday in India tomorrow. This will be followed by another public holiday in several countries, including the regional hub of Singapore, on 19 April.

State-controlled Chinese utility Yudean yesterday issued a tender seeking 65,000t cargoes of Indonesian coal with a calorific value (CV) of NAR 4,500-5,500 kcal/kg for 1-15 May delivery, as well as 50,000-65,000t cargoes of Indonesian coal with the same CV for delivery during 1-20 May. The utility, based in Guangdong in south China, did not indicate the total amount it intends to buy, revealing only the cargo sizes it will accept.

The tender closed earlier today. Price details for cargoes awarded in the tender are expected to give the market a better sense of direction in the coming days.

In the actively traded GAR 4,200 kcal/kg spot market, bids for May-loading geared Supramax shipments were slightly higher compared with levels heard yesterday, although offers were fairly steady. A Chinese buyer bid for a May-loading Supramax of this coal at $37/t, up slightly from bid levels heard in the market yesterday at $36-36.50/t, while most offers were around $38.50-39/t.

This is broadly in line with confirmed deals last week, when three late-April/early-June loading geared Supramaxes were concluded at $37.50-37.80/t. Argus last assessed fob GAR 4,200 kcal/kg prices on 12 April at $37.72/t, up by 43¢/t from a week earlier.

Trade was also muted in the ICI 4 derivatives market today. April contracts were bid at $37.60/t and offered at $38.40/t today. By comparison, April ICI 4 derivatives were bid at $37.35-37.50/t yesterday and offered at $38.50/t. May contracts were bid today at $37.80/t and offered at $38.50/t, while June was bid at $37.75/t. This compares with May contracts bid at $37.80/t yesterday, with no matching offers.

The Australian thermal coal market was largely unchanged today.

A Chinese trader received offers of $61-62/t fob Newcastle for May and June Capesize cargoes of NAR 5,500 kcal/kg coal. Chinese buying interest in these shipments was heard to be around the $57-59/t fob Newcastle mark, steady from yesterday.

A trade was confirmed to have been concluded after hours on 12 April at $60/t fob Newcastle for a May-loading Capesize vessel of NAR 5,500 kcal/kg coal. But most market participants considered the typical tradable price to be below that level.

Argus assessed the price most recently at $58.60/t fob Newcastle on 12 April, and other trades confirmed late last week were at $59/t fob Newcastle for May and June Capesize cargoes.

News Source: Argus Media