Indian buyers look harder at Indonesian coal
Indian buyers started taking more interest in Indonesian coal this week, issuing more enquiries as they gear up for an end to the monsoon season.
Indian buyers typically come back into the coal and petroleum coke markets in the second half of August. Several buyers and traders reported increased enquiries for supply of physical low-CV GAR 4,200 kcal/kg (NAR 3,800) coal. Some sellers expect a slight rebound in the market for September-loading cargoes, but several Indian buyers took the view that prices might soften a little further and remained hesitant about placing firm bids.
One geared supramax of fob Indonesian GAR 4,200 kcal/kg coal was sold by an Indonesian producer at $41/t for end-August loading. And a geared supramax of end-August GAR 4,200 coal was heard sold to India at $40.50/t, but both August cargoes were too prompt for the Argus assessment window.
This followed a trade yesterday for a geared supramax of first-half September loading GAR 4,200 coal at $40.25/t.
A September-loading Panamax of fob Indonesia GAR 4,200 kcal/kg coal was heard traded at $41/t, but this could not be confirmed, while a Panamax for September loading was offered at $42.50/t against a bid at $40.50/t.
This compares with a fob Indonesia October-loading Panamax of GAR 4,200 coal that was bid and offered at $43/t via brokers, suggesting that demand later in the year will be stronger. But no deal was reported as the bid appeared to be tied to coal from a specific mine.
On the fob Newcastle 5,500 kcal/kg market, a series of 25,000t clips were bid on the Globalcoal screen at $68/t for September loading, $69.50/t for October, and $70/t each for November and December. All were stronger than yesterday's bid of $67/t by a western trader seeking 25,000t of the same high-ash coal. The bids do not qualify for inclusion in the Argus index as they fall below 50,000t.
The ICI 4 paper market was little changed ahead of the Indonesian holiday period, with a wide spread between buyers and sellers. One broker put his bid-offer spread $1/t apart for August paper at $40.20/t vs $41.20/t, the September spread $2/t apart at $39.50-41.40/t and October roughly $2/t apart at $39.25-41.20/t. The same broker saw November weaker at $36.80/t bid, with fourth-quarter 2018 bid around $39.25/t.
In China, temperatures are starting to fall, and this is expected to gradually slow consumption. The September ZCE futures contract closed at 627.8 yuan/t today, tracking relatively closely to recent physical spot market levels but softening by Yn6.4/t from yesterday. Open interest on the contract fell by 22,298 lots from yesterday to 100,638 lots, with each lot of 100t indicating potential physical delivery volume at around 5mn t in September.
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