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Low-CV Indonesian physical coal prices edge lower

Source: Pixabay, May 18, 2019

There were further signs that the low-calorific value (CV) Indonesian physical coal market was coming under pressure today, with bids and offers starting to edge lower amid weaker demand from key buyers China and India.

The actively traded GAR 4,200 kcal/kg (NAR 3,800 kcal/kg) market saw an early June loading geared supramax cargo traded at $38.75/t, well below most offers in the market for this type of coal earlier this week. A June-loading cargo of this coal was bid at the slightly higher price of $38.80/t, while offers edged lower to around $39.25-39.50/t. This is lower than most offers in the market earlier this week for supramax GAR 4,200 kcal/kg shipments that were in a $41-41.25/t range.

Trade was also slow in the ICI 4 derivatives market today, after a total of 35,000t of mostly June ICI 4 thermal coal derivatives contracts traded on the Chicago Mercantile Exchange yesterday.

Bids for May ICI 4 derivatives were unchanged from yesterday at $38.90/t, although offers fell to $39.25/t from $39.50/t yesterday. June ICI 4 derivatives were bid in a $38-38.40/t range today and offered in a $38.65-39/t range, with different Singapore-based brokers.

A total of 120,000t of ICI 4 derivatives contracts have traded so far this week, taking the total volume so far this month to 225,000t.

Trade was also muted elsewhere in the Indonesian physical market, although there are signs that GAR 3,400 kcal/kg (NAR 3,000 kcal/kg) prices are also starting to edge lower. An early June loading geared supramax cargo of this coal traded at $23/t, which is at the lower end of the bid-offer range in the market for most of this week, when bids were at $23/t and most offers were at $24/t. Bids have fallen even further, with a June-loading supramax cargo bid today at the lower price of $22.75/t.

The Australian thermal coal market saw a producer sell a 100,00t June-July loading cargo of NAR 5,500 kcal/kg coal at $61.50/t fob Newcastle. The cargo will load in either June or July depending upon the choice of the seller.

The NAR 5,500 kcal/kg coal market was last assessed by Argus at $60.63/t fob Newcastle on 10 May.

The NAR 6,000 kcal/kg market saw a 75,000t July-loading cargo bid and offered at $80-83.85/t fob Newcastle. This will put the price well below where the index was assessed on 10 May at $85.03/t fob Newcastle.

The Chinese domestic market saw bids and offers of NAR 5,500 kcal/kg coal unchanged from yesterday at around 618-620 yuan/t fob north China ports.

China's futures market saw the Zhengzhou commodities exchange September contract close at Yn601.80/t today, up by Yn1.20/t from yesterday.


News Source: Argus Media