Physical prices of low-calorific value (CV) Indonesian held relatively steady today, as details of a cargo awarded in a Chinese utility tender started to filter through to the market at a lower price compared with recent comparable spot trades.
State-owned Chinese utility Huaneng awarded a 50,000t cargo of NAR 3,800 kcal/kg (GAR 4,200 kcal/kg) Indonesian coal at around 325-332 yuan/t plus value-added tax on a cfr Shanghai basis for delivery during mid-September. The price nets back to around $31.80-32/t on a fob basis.
Spot trades by comparison involving August- and September-loading geared supramax cargoes of this coal traded last week in a $33-33.15/t range. Argus last assessed this market at $33.13/t on 2 August, down by 36¢/t from the previous week.
A cross-month late August/early September loading supramax GAR 4,200 kcal/kg cargo was bid at $32.50/t, with other bids at slightly higher prices. Offers for August-loading shipments were at around $33-33.50/t, while a September-loading cargo was offered at the slightly higher price of $34/t.
Trade was slow in the ICI 4 derivatives market after 25,000t was cleared on the CME yesterday. August ICI contracts were bid today at $32.35-32.60/t and offered at $33/t with different Singapore-based brokers. This was down from the last Argus assessed price for this month on 31 July at $33.80/t. September contracts were bid today at $32.35-32.40/t and offered at $32.75/t, broadly in line with the last Argus assessed settlement price for September of $32.45/t yesterday.
The Australian market saw high-CV coal prices recovering somewhat following last week's more than $4/t drop.
A 75,000t October-loading cargo of NAR 6,000 kcal/kg coal traded for $68.25/t fob Newcastle on screen today. This was up from a trade last week at $65/t fob Newcastle for a September-loading cargo of the same size. The index was assessed at $65.73/t fob Newcastle most recently on 2 August.
A 65,000t cargo of the same material also traded on screen for $70/t fob Newcastle for November loading, but this is not prompt enough for inclusion in the Argus index. A 25,000t clip, which is also too small for inclusion in the index, traded at $70/t fob Newcastle for November loading.
The NAR 5,500 kcal/kg market had a Capesize cargo loading in the first half of September offered at $52/t fob Newcastle. But there was a perception that the price was too high for the current market, which was assessed at $50.10/t fob Newcastle last week. Bids were scarce.
The China domestic market had physical NAR 5,500 kcal/kg coal offered at around Yn590-595/t fob north China ports. Bids for the coal were around Yn590/t fob.
Combined coal use at the main coastal utilities has registered consecutive day-on-day falls since 30 July, reaching as low as 685,000t/d yesterday, which dampened utility buying interest.
China's futures market saw the September contract on the Zhengzhou commodities exchange close at Yn578/t today, up by Yn1/t from yesterday. The futures price is nearing the prevailing tradeable prices of physical coal as the delivery month approaches.