Weak demand pressures low-CV Indonesian coal prices
The low calorific value (CV) Indonesian physical coal market came under further pressure from weak Chinese demand, as details emerged of a deal concluded at a lower price than recent similar transactions.
An early December loading geared Supramax GAR 4,200 kcal/kg cargo traded today at $33.85/t. This is below the latest Argus price assessment for this grade of coal at $34.33/t on 8 November and also below the $34.50-34.75/t range at which cross-month late November to early December-loading geared Supramax GAR 4,200 kcal/kg cargoes traded late last week.
Despite this, several producers kept their offer prices high at around $35/t for December-loading shipments on expectations demand could begin to increase again from next month. China's lunar new year holiday falls in January next year, earlier than usual, which could bring forward the typical pre-holiday restocking. Chinese import quotas are also expected to be reset in January, when cargoes that are sold in December are likely to arrive at Chinese ports.
In the ICI 4 derivatives market, a 15,000t December clip traded at $34.05/t, brokered by Singapore-based Evolution. This was up from yesterday's Argus settlement price for this month at $33.60/t. But bids and offers in the ICI 4 futures market remained scarce, with November contracts bid at $34/t and December bid at $33.80/t against no corresponding offers.
In the Australian thermal coal market, a December-loading Panamax of NAR 5,500 kcal/kg coal was offered at $51/t fob Newcastle on the Global Coal screen. That is down from the most recent Argus assessment of $51.18/t fob Newcastle on 8 November.
China's domestic coal prices showed signs of stabilising yesterday and today. Bids for NAR 5,500 kcal/kg coal were no higher than 550 yuan/t fob northern China ports today, while offers were around Yn555/t.
In China's futures market, the January contract on the Zhengzhou commodity exchange closed at Yn550.6/t, up by Yn0.8/t on the day.
source: Argus Media
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