ICI 4 coal derivatives trade out to 1Q 2020
The ICI 4 coal derivatives market traded out to the first quarter of 2020 late yesterday, the first trades cleared into next year since the contract launched in February 2018.
Interest has been building further along the curve and a number of third and fourth-quarter 2019 trades cleared for the first time last week, with more cleared on the CME so far this week. But yesterday's first-quarter 2020 trades were the furthest out to date.
A total of 111,000t of ICI 4 derivatives contracts traded late yesterday after Asia-Pacific trading hours. The first-quarter 2020 traded in two lots/month at $40.70/t, while the third and fourth quarters of 2019 traded at $40.30/t for 10 lots/month and 15 lots/month respectively.
An ICI 4 April contract also traded yesterday at $39.60/t, down from closing at $40.50/t on 8 March, even as the prompt spot market remained tight amid weather disruptions.
Yesterday's trades means 491,000t of ICI 4 contracts have traded so far this month, taking the total volume since the contract launched last year to just under 2.6mn t.
The derivatives market was more subdued today after yesterday's flurry of trades. April contracts were bid at $39.20-39.40/t and offered at $39.60-39.75/t with Singapore-based brokers. Third-quarter 2019 contracts were bid at $40/t and offered at $41.25/t.
The Indonesian physical market was also relatively quiet. There is a view among some traders that buyers are opting for the market sidelines waiting for a clearer sense of direction to develop. But supplies remain tight because of heavy rain across parts of Indonesia, with deals relatively slow to emerge this week and bids holding relatively steady even as offer prices are edging higher.
Two April-loading GAR 4,200 kcal/kg cargoes traded at $39-39.35/t, which was broadly in line with similar trades last week. But offers are being kept high by the supply tightness, with at least one seller offering an April supramax shipment of this coal as high as $43/t, while a bid was at $41.50/t.
Demand for low-calorific value (CV) product has increased as prices of other grades have risen. An April-loading GAR 3,400 kcal/kg cargo traded at $23.50/t, which was up compared with a cross-month late March/early April loading supramax cargo of the same coal that traded last week at $22.75/t.
Price volatility in the Australian coal market has increased as market participants try to grapple with the effects of stricter and somewhat patchy Chinese controls on Australian imports.
An April-loading Capesize cargo of NAR 5,500 kcal/kg coal traded today for $58.50/t fob Newcastle, up from a $56.50/t fob trade over the weekend. This specification was also bid at $56/t fob and offered at $58/t fob, while a Capesize cargo loading in late April or early May was bid at $58/t fob and offered at $59/t fob.
The NAR 5,500 kcal/kg price was most recently assessed by Argus at $58.15/t fob Newcastle on 8 March.
In the higher CV market, a 25,000t April-loading clip of NAR 6,000 kcal/kg coal traded on screen for $92.50/t fob Newcastle. No April cargoes were confirmed traded last week, but 25,000t cargoes transacted last week at $96.90-97/t fob Newcastle for May loading.
Prices in the Chinese domestic market were stabilising as more mines are expected to reopen later this week and next week. Offers of NAR 5,500 kcal/kg coal were around 640 yuan/t fob north China ports today compared with Yn640-645/t late last week. Utilities bid the coal at Yn630-635/t. The bids and offers indicated a drop from Argus' last assessments of Yn642.33/t ($95.36/t) fob Qinhuangdao on 8 March.
China's futures market saw the Zhengzhou commodity exchange May contract close at Yn593.80/t, edging up by Yn1/t from yesterday.
Related news posts
Barge delays at Algiers lock near New Orleans
Barge delays at Algiers lock near New Orleans
Houston, 24 April (Argus) — Barges are facing lengthy delays at the Algiers lock near New Orleans as vessels reroute around closures at the Port Allen lock and the Algiers Canal. Delays at the Algiers Lock —at the interconnection of the Mississippi River and the Gulf Intracoastal Waterway— have reached around 37 hours in the past day, according to the US Army Corps of Engineers' lock report. Around 50 vessels are waiting to cross the Algiers lock. Another 70 vessels were waiting at the nearby Harvey lock with a six-hour wait in the past day. The closure at Port Allen lock has spurred the delays, causing vessels to reroute through the Algiers lock. The Port Allen lock is expected to reopen on 28 April, which should relieve pressure on the Algiers lock. Some traffic has been rerouted through the nearby Harvey lock since the Algiers Canal was closed by a collapsed powerline, the US Coast Guard said. The powerline fell on two barges, but no injuries or damages were reported. The wire is being removed by energy company Entergy. The canal is anticipated to reopen at midnight on 25 April. By Meghan Yoyotte Send comments and request more information at feedback@argusmedia.com Copyright © 2024. Argus Media group . All rights reserved.
Baltimore to temporarily open 4th shipping channel
Baltimore to temporarily open 4th shipping channel
Cheyenne, 24 April (Argus) — The Port of Baltimore is preparing to open another, deeper temporary shipping channel this week so at least some of the vessels that have been stranded at the port can depart. The new 35-ft deep Fort McHenry Limited Access Channel is scheduled to be open to commercially essential vessels from 25 April until 6am ET on 29 April or 30 April "if weather adversely impacts vessel transits," according to a US Coast Guard Marine Safety Information Bulletin. The channel will then be closed again until 10 May. The channel also will have a 300-ft horizontal clearance and 214-ft vertical clearance. This will be the fourth and largest channel opened since the 26 March collapse of the Francis Scott Key Bridge. The Unified Command has said that the new limited access channel should allow passage of about 75pc of the types of vessels that typically move through the waterway. Vessels that have greater than 60,000 long tons (60,963 metric tonnes) of displacement will likely not be able to move through the channel and those between 50,000-60,000 long tons of displacement "will be closely evaluated" for transit. There were seven vessels blocked from exiting the port as of 27 March, including three dry bulk carriers, one vehicle carrier and one tanker, according to the US Department of Transportation. Two of the bulk carriers at berth in Baltimore are Kamsarmax-sized coal vessels, data from analytics firm Kpler show. The US Army Corps of Engineers still expects to reopen the Port of Baltimore's permanent 700-foot wide, 50-foot deep channel by the end of May. The Key Bridge collapsed into the water late last month when the 116,851dwt container ship Dali lost power and crashed into a bridge support column. Salvage teams have been working to remove debris from the water and containers from the ship in order to clear the main channel. By Courtney Schlisserman Send comments and request more information at feedback@argusmedia.com Copyright © 2024. Argus Media group . All rights reserved.
EU adopts sustainability due diligence rules
EU adopts sustainability due diligence rules
Brussels, 24 April (Argus) — The European parliament has formally approved a Corporate Sustainability Due Diligence Directive (CSDDD), which will require large EU companies to make "best efforts" for climate change mitigation. The law will mean that relevant companies will have to adopt a transition plan to make their business model compatible with the 1.5°C temperature limit set by the Paris climate agreement. It will apply to EU firms with over 1,000 employees and turnover above €450mn ($481mn). It will also apply to some companies with franchising or licensing agreements in the EU. The directive requires transposition into different EU national laws. It obliges member states to ensure relevant firms adopt and put into effect a transition plan for climate change mitigation. Transition plans must aim to "ensure, through best efforts" that business models and company strategies are compatible with transition to a sustainable economy, limiting global warming to 1.5°C and achieving climate neutrality by 2050. Where "relevant", the plans should limit "exposure of the company to coal-, oil- and gas-related activities". Despite a provisional agreement, EU states initially failed to formally approve the provisional agreement reached with parliament in December, after some member states blocked the deal. Parliament's adoption — at its last session before breaking for EU elections — paves the way for entry into force later in the year. Industry has obtained clarification, in the non-legal introduction, that the directive's requirements are an "obligation of means and not of results" with "due account" being given to progress that firms make as well as the "complexity and evolving" nature of climate transitioning. Still, firms' climate transition plans need to contain "time-bound" targets for 2030 and in five-year intervals until 2050 based on "conclusive scientific" evidence and, where appropriate, absolute reduction targets for greenhouse gas (GHG) for direct scope 1 emissions as well as scope 2 and scope 3 emissions. Scope 1 refers to emissions directly stemming from an organisation's activity, while scope 2 refers to indirect emissions from purchased energy. Scope 3 refers to end-use emissions. "It is alarming to see how member states weakened the law in the final negotiations. And the law lacks an effective mechanism to force companies to reduce their climate emissions," said Paul de Clerck, campaigner at non-governmental organisation Friends of the Earth Europe, pointing to "gaping" loopholes in the adopted text. By Dafydd ab Iago Send comments and request more information at feedback@argusmedia.com Copyright © 2024. Argus Media group . All rights reserved.
Ayala’s South Luzon coal plant eligible for retirement
Ayala’s South Luzon coal plant eligible for retirement
Manila, 24 April (Argus) — Early decommissioning of coal-fired power plants in the Philippines has advanced with utility Ayala Energy's 246MW South Luzon Thermal Energy eligible for the US-based Rockefeller Foundation's coal to clean credit initiative (CCCI). The Rockefeller Foundation is a non-profit philanthropic group that creates and implements programmes in partnership with the private sector across different industries aimed at reversing climate change. Ayala has been working with the foundation to further shorten South Luzon's operating life from an original decommissioning date of 2040 to 2030. Doing so could result in the reduction of up to 19mn t of carbon emissions, Ayala said. An assessment by the Rocky Mountain Institute, the technical partner of the foundation for its energy-related projects, found that an early retirement date of 2030 instead of the original retirement date of 2040 could yield positive financial, social and climate outcomes. But decommissioning by this date will require carbon finance. Carbon financing will need to cover costs associated with the early retirement of the power plant's power supply contract, costs associated with 100pc clean replacement of the plant's power generation, plant decommissioning and transition support for workers affected by the plant's early closure, Ayala said. Ayala's listed arm ACEN welcomed the plant's eligibility for the CCCI programme, as its retirement is part of the company's goal to have its power generation portfolio composed solely of 100pc renewable sources by 2025. The Philippines' Department of Energy (DOE) said if successful, the pilot programme could serve as a basis for the development of other early retirement efforts as part of the country's plan to reduce carbon emissions. The DOE is seeking the early decommissioning of coal-fired power plants older than 20 years with a combined total capacity of 3.8GW by 2050, as part of the Philippines' transition to clean energy. By Antonio delos Reyes Send comments and request more information at feedback@argusmedia.com Copyright © 2024. Argus Media group . All rights reserved.
Business intelligence reports
Get concise, trustworthy and unbiased analysis of the latest trends and developments in oil and energy markets. These reports are specially created for decision makers who don’t have time to track markets day-by-day, minute-by-minute.
Learn more