ICI 4 coal derivatives market begins to stabilise
There were signs that the ICI 4 thermal coal derivatives market was beginning to stabilise today, after a total of 35,000t of June contracts were cleared on the Chicago Mercantile Exchange (CME) at slightly firmer prices than similar trades that were concluded earlier this week.
The slight increase in prices today was possibly the result of short-covering by traders following recent Chinese utility tenders, some of which sought low calorific-value (CV) Indonesian material.
Chinese state-controlled power utility Guodian earlier this week issued a tender to buy 695,000t of imported thermal coal, all for delivery to its power plants in east China's Jiangsu province to meet peak summer demand. The tender, which closed on 4 June, included one request for six 45,000t cargoes of imported coal for delivery to Taizhou port from 1 July to 15 August, including a cargo of NAR 3,800 kcal/kg (GAR 4,200 kcal/kg) product.
Fellow Chinese utility Huaneng was also heard today to have awarded a Supramax NAR 3,800 kcal/kg cargo at 338 yuan/t ($49/t) on a cfr basis, which nets back to a fob value of $33/t.
Of today's trades, a 5,000t June ICI 4 clip traded at $35.65/t on the CME. This was followed by two June clips of 15,000t and 10,000t at $35.50/t. Another 5,000t June clip traded later in the day at a slightly higher price of $35.80/t. All of today's trades bar the 10,000t June clip were brokered by Singapore-based Evolution.
The $35.50-35.80/t range at which today's June contracts were cleared on the CME was marginally firmer than the $35.25-35.45/t levels at which June contracts were cleared on the exchange earlier this week and late last week.
June ICI derivatives were bid today at $35.55/t and offered at $35.80/t. This is broadly in line with 4 June, when June was bid at $35.45/t and offered at $35.70-35.85/t with different Singapore-based brokers prior to a public holiday in Singapore yesterday.
Today's trades mean 45,000t of ICI 4 derivatives contracts have now traded so far this week, taking the total volume to have been cleared on the CME to 3.725mn t since the contract's launch in February last year.
Trade in the Indonesian physical spot market was muted today because of a week-long public holiday in the country. In addition, Chinese markets will be closed tomorrow for a public holiday.
A July-loading Supramax GAR 4,200 kcal/kg cargo traded at $35.75/t, while a June-loading cargo of the same coal traded at a higher price of $36.25/t. Bids for July-loading geared Supramax cargoes of this coal were at around $35/t, while offers were around $36-37/t today.
In the Australian thermal coal market, a Chinese buyer purchased a Panamax cargo of NAR 5,500 kcal/kg coal at $54.50/t fob Newcastle for July loading. The shipment was heading to a non-China destination. Bids were at $54.20/t fob Newcastle and offers were at $55/t fob Newcastle for July-loading Capesizes.
In the Chinese domestic market, NAR 5,500 kcal/kg coal was heard to be trading around Yn590-600/t on a fob northern China ports basis today.
In China's futures market, the ZCE September contract closed at Yn582/t, up by Yn576.80/t from yesterday.
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India’s Adani Power raises imported coal use in Jan-Mar
India’s Adani Power raises imported coal use in Jan-Mar
Singapore, 6 May (Argus) — India's leading private sector utility Adani Power more than doubled its use of imported thermal coal during January-March and in the April 2023-March 2024 fiscal year to meet rising power demand. The Bombay Stock Exchange-listed firm used 5.19mn t of imported coal over January-March, more than twice that of 1.99mn t a year earlier. Domestic coal burn also rose by nearly 18pc on the year to 8.83mn t during January-March, following higher availability of local fuel and increased dispatches to utilities. Adani Power consumed 19.44mn t of imported coal over India's April 2023-March 2024 fiscal year. This was also more than double that of 7.66mn t in 2022-23. Its domestic coal burn increased by 10pc on the year to 31.72mn t in 2023-24. Higher imports came on the back of a sharp drop in seaborne prices. The Argus -assessed Indonesian GAR 4,200 kcal/kg coal averaged $57.88/t fob Kalimantan over April 2023-March 2024, down by over 31pc from an average of $84.45/t in the year earlier. The company's fuel cost stood at 3.33 rupees/kWh sold (0.04¢/kWh sold) in January-March, down from Rs5.30/kWh sold a year earlier because of lower blended fuel costs, following a decline in seaborne coal prices. Fuel cost for 2023-24 stood at Rs3.59/kWh compared with Rs4.78/kWh in the previous year. Lower imported coal prices also boosted power offtake under imported coal-based power purchase agreements. The company sold 22.13bn units of electricity in January-March, up significantly from 14.25bn units sold a year earlier. It sold 79.27bn units in 2023-24, up from 53.39bn units in the year earlier. Higher volumes during January-March and the fiscal year were driven by its Mundra, Udupi, Raipur, and Mahan plants — apart from the incremental contribution of the Godda unit — which were commissioned in April 2023. Domestic power sales volumes were driven by growing power demand across the country, the company said. Utility demand could continue to support imports by utilities and lift overall Indian demand for seaborne coal. India imported 14.27mn t of thermal coal in March, up by 8pc from 13.2mn t a year earlier, according to shipping broker Interocean data. Thermal power expansion plans Adani Power operates 15.25GW of thermal generation capacity in the Gujarat and Maharashtra states of west India, Madhya Pradesh and Chhattisgarh in central India, Rajasthan in north India, Karnataka in south India and Jharkhand in eastern India. The firm is eyeing a capacity of more than 24GW by 2029. It is undertaking a brownfield thermal capacity expansion of 1.6GW at its 1.2GW Mahan power project in Madhya Pradesh. It has started developing a 1.6GW expansion at its existing 600MW unit in Chhattisgarh. Adani Power has also emerged as the frontrunner to acquire thermal generation capacity and an under-construction project from domestic debt-ridden Lanco Amarkantak Power. Lanco owned and operated a 600MW thermal power plant in central India's Chhattisgarh state and was planning 1.32GW of generating capacity under the second phase of the project. Adani is in the process of acquiring a 1.2GW debt-ridden thermal power project in south India's Tamil Nadu state. Plant operator Coastal Energen is also having a corporate resolution insolvency process. It is evaluating an organic expansion of 1.6GW, besides considering other inorganic acquisition opportunities, to meet strong demand for thermal power in the coming years, the company said. By Ajay Modi Send comments and request more information at feedback@argusmedia.com Copyright © 2024. Argus Media group . All rights reserved.
Canadian rail workers vote to launch strike: Correction
Canadian rail workers vote to launch strike: Correction
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Japan's trading firms see metals prices cutting profits
Japan's trading firms see metals prices cutting profits
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US southbound barge demand falls off earlier than usual
US southbound barge demand falls off earlier than usual
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