Indonesian coal prices little changed, activity rises

24-December-2018

Indonesian thermal coal prices held relatively steady, although activity increased following the awarding of two Chinese utility tenders. Sellers are increasingly keen to sell cargoes before the Christmas and new year holidays.

Bids and offers for geared supramax vessels have remained relatively steady this week, with a January-loading cargo offered at $30.50/t that received bids at $30/t. Deals involving this type of coal were done in a $29.80-31/t range last week, with the price at which transactions were concluded rising as the week progressed.

In the ICI 4 derivatives market, which clears on the CME, trade was quiet with no transactions. A first-quarter 2019 contract was offered at $33.50/t, although bids were scarce. The likely trading level for December 5,000t clips was marked by Singapore-based brokers yesterday at $30.50/t, with January in the region of $31.35 and $31.50/t and February at virtually flat to January. A total of 45,000t of ICI 4 derivatives have cleared on the CME so far this month, taking the total volume to have been cleared on the CME since the contract launched in February to around 1.75mn t.

Prices rlsewhere in the Indonesian physical market were holding relatively steady. Two January-loading NAR 4,800 kcal/kg Panamax shipments were awarded in the Yudean tender at $46.80/t, while two Panamax shipments of slightly higher quality NAR 5,200 kcal/kg product were awarded in the Huaneng tender at $55/t and $56/t respectively. Argus last assessed similar quality GAR 5,000 kcal/kg prices at $46.67/t on 14 December, down by 14¢/t compared with the previous week.

The Chinese market saw a late January loading domestic Panamax cargo of NAR 5,500 kcal/kg coal traded at 610 yuan/t ($88.57/t) on a cfr South China basis. The deal involved a domestic cargo and will discharge at Zhejiang port.

China’s futures market saw the January contract on the Zhengzhou commodity exchange close at Yn592.80/t today, down by Yn2.40/t compared with yesterday. The May contract closed at Yn560.40/t, down by Yn2.60/t.

Coal consumption in the east and south of China eased off this week following a cold snap in early and mid-December. This further weighed on coal demand amid high stocks, although inventories at Qinhuangdao port in north China’s Hebei province fell to 6.19mn t yesterday, a 4pc fall from 6.43mn t a week earlier, according to coal industry association the CCTD.

Stocks at Qinhuangdao had been on a mostly steady rising trend since the start of November, with just one other weekly dip at the end of that month. But the most recent week’s data could signal a change to this trend, suggesting domestic utilities are starting to work down their stocks and will need to buy more coal to replenish them.

Source: ARGUS MEDIA