Activity gathered pace in the ICI 4 thermal coal derivatives market, with 125,000t changing hands today, pushing the volume traded so far this month to over 1mn t.
More than 3mn t has cleared on CME since the contract's launch last year.
Some 60,000t cleared today at $37.50/t for the third and fourth quarters of 2019, in 10,000t lots. In addition, one 40,000t lot and one 10,000t lot for May traded at $36.90/t each, while a 5,000t lot for April changed hands at $36.50/t — all brokered by Singapore-based Evolution. Another two 5,000t clips, also for April, traded at $36.65/t each, brokered by Singapore-based GFI. April ICI 4 was also bid at $36.65/t today and offered at $37/t.
The futures trading provided some visibility on forward perceptions in this typically prompt physical market. The forward curve showed the second and third quarters of 2019 commanding a premium of around 60¢/t to the May contract today, while the prompt April contract was weakest.
Details of confirmed trades in the GAR 4,200 kcal/kg physical coal market were relatively scarce today, after at least three April-loading geared vessels changed hands yesterday at $36.25-36.60/t, while a Panamax of the same coal was heard traded at $38/t. Bid-offer levels for this coal were steady today, with April-loading geared Supramax cargoes bid at $36.00-36.50/t and offered at $36.50-38.25/t.
In the mid-CV market for Indonesian coal, an Asian trader sold an April-loading Panamax of GAR 5,600 kcal/kg (NAR 5,250) coal to a Chinese buyer at $58/t, but this grade is not included in the Argus index.
Elsewhere in the Indonesian coal market, an April-loading cargo of GAR 3,800 kcal/kg coal with 0.6pc sulphur loading in April was sold to a buyer in China at $28.60/t. Another Supramax of a similar-quality coal loading in the first half of April traded at $29.50/t, but the destination was not disclosed.
Several bids for GAR 3,800 kcal/kg May-loading Supramax cargoes were also reported from China at $28.75/t, up from $28/t earlier in the week, but some offers were unchanged at $30/t.
A Chinese utility was also reported to have bid for three shipments of GAR 3,800 kcal/kg coal from Indonesia — with one geared Supramax cargo to be loaded in May, June and July — on an index-linked basis.
In the Australian thermal coal market, a handful of Chinese buyers remained in the market for NAR 5,500 kcal/kg fob Newcastle coal and trades were heard concluded in the $56.50-57.15/t fob Newcastle range. One Chinese trader sold a May-loading Capesize cargo at $57.00-57.50/t fob Newcastle, but did not disclose the exact price.
A major trading firm was heard to have sold a May Capesize cargo for $56.50/t fob Newcastle yesterday, with another trader unsuccessfully offering $57/t fob Newcastle for the same cargo. And a May-loading Capesize was confirmed bid at $57/t fob Newcastle, over-the-counter.
Some Indian buyers said they were unlikely to pay as much as Chinese buyers, especially because Australian NAR 5,500 kcal/kg cargoes would land in India at a premium of around $2.50/t to South African NAR 5,500 kcal/kg coal on a landed basis on the east coast.
A May-loading 50,000t cargo was bid on screen at $55.50/t fob Newcastle and a 25,000t May-loading cargo was bid at $55/t fob Newcastle.
In the higher-CV market, some market participants were heard starting to sign term contracts, following the recent conclusion of the Glencore-Tohoku negotiations for term supply from April 2019 to March 2020. The reference price for term contracts was agreed at around $94.75/t this year for GAR 6,322 kcal/kg Australian coal, although some participants often sign contracts at lower prices.
The price of smaller trades of fob Newcastle NAR 6,000 kcal/kg coal edged lower on screen today, with a June-loading deal concluded at $90.75/t fob Newcastle. That compared with $91.00-91.25/t fob Newcastle earlier in the week.
In China's domestic market, offers of NAR 5,500 kcal/kg domestic coal were at 625-628 yuan/t fob northern Chinese ports today. Utilities bid at around Yn620/t, and offers and bids were largely steady from early this week.
In China's futures market, the May contract on the ZCE exchange closed at Yn594.2/t, up by Yn1/t from yesterday.
