Indonesian coal prices steady amid slow spot trade

There were further signs that the low-calorific value Indonesian coal market was softening today, as details of a trade involving an August-loading GAR 4,200 kcal/kg cargo emerged at a lower price than recent comparable transactions.

The August-loading geared supramax GAR 4,200 kcal/kg cargo sold to a Chinese buyer at $33/t today. This is broadly in line with bids and offers in the market for this type of coal so far this week, but below the $34.50/t level that a similar deal was done at last week. Bids for August-loading supramax cargoes of this coal were stable compared with yesterday at around $32-33/t, while most offers were also little changed at around $33-34/t.

The ICI 4 derivatives market was quiet today after 150,000t traded earlier this week, taking the total volume cleared this month to 484,000t. August ICI 4 futures were bid at $33.75/t and offered at $34.25/t, while September was bid at $33.70/t and offered at $34.20/t. By comparison, Argus-assessed settlement prices yesterday for August and September were both at $34.20/t.

The Australian market saw an October-loading 25,000t clip of NAR 6,000 kcal/kg coal traded at $74.75/t fob Newcastle, while a September-loading 75,000t cargo traded at a $2.80/t discount to the GlobalCoal index. But neither of these trades were relevant to the Argus index.

China's domestic spot market had the tradeable level for NAR 5,500 kcal/kg coal around 600 yuan/t fob north China ports, largely steady compared with earlier this week.

A heatwave across large parts of China since last week has raised power demand for air-conditioning, which in turn is boosting coal consumption and market participants expect this could offer some support to domestic prices for the rest of this month.

China's futures market had the September contract on the Zhengzhou commodity exchange close at Yn592.40/t, down by Yn0.80/t from yesterday.