ICI 4 coal derivatives prices hold steady
A total of 35,000t of mostly June ICI 4 thermal coal derivatives contracts traded on the Chicago Mercantile Exchange (CME) today at similar prices compared with recent similar deals.
Of today's total volume, a 10,000t May clip cleared on the CME at $39.25/t, brokered by Singapore-based Evolution. This was the same price at which three trades comprising a total of 35,000t of May contracts traded yesterday. Of today's 25,000t of June trades, 20,000t of which was brokered by Singapore-based GFI, two 5,000t clips and a 15,000t clip each traded at $38.70/t. This was at the lower end of the price range at which yesterday's June trades were cleared on the CME, when two 5,000t clips also traded at $38.70/t and a 10,000t contract was cleared on the exchange at the higher price of $39/t.
Today's trades mean that 120,000t of ICI 4 derivatives contracts have traded so far this week, taking the total volume so far this month to 225,000t.
Bids for May contracts edged down slightly to $38.90/t today compared with $39/t yesterday. But May offers were steady at $39.50/t. Third-quarter 2019 contracts were offered at $39.30/t, although there were no corresponding bids, while fourth-quarter 2019 contracts were bid at $35.45/t and offered at $39.45/t. By comparison, the most recent fourth-quarter 2019 trades were cleared on the CME last week, with 5,000 t/month each for October, November and December done at $38.20/t.
Despite the recent increase in activity in the ICI 4 derivatives market the Indonesian physical market remains muted. High utility inventories in China and India are dampening demand. Chinese buyers are also being deterred from purchasing seaborne coal by the recent depreciation of the yuan against the US dollar, which is making imported coal that is priced in dollars more expensive.
Amid the lack of activity in the physical market this week, there is a sense that prices could soon begin to soften. This view is mainly being driven by the lack of demand and subsequent lack of bids. A bid, possibly from an Indian buyer, for a June-loading GAR 4,200 kcal/kg (NAR 3,800 kcal/kg) Supramax shipment was at $39/t, while offers were in a $39.50-41/t range. By comparison yesterday, a seller was offering June-loading cargoes of this coal at $41/t and another at $41.25/t. But another seller was offering June-loading supramax cargoes at the lower price of $39/t.
The Australian thermal coal market saw a handful of small NAR 6,000 kcal/kg trades done on screen today, although these did not meet the minimum 50,000t cargo size for inclusion in the Argus index. Two July-loading 25,000t fob Newcastle clips traded at $86.25/t and $85.75/t. An August-loading fob Newcastle clip of the same size traded at $85.50/t. A 50,000t NAR 6,000 kcal/kg clip for June traded on screen late in the Asia-Pacific business day at a $6/t discount to the index, suggesting how steeply prices are falling.
Demand for high-calorific value Australian coal has been weak. Japan, which is the main buyer of this type of coal, had a mild winter and is well stocked.
The Chinese domestic market saw offers of NAR 5,500 kcal/kg coal unchanged from yesterday at around 620 yuan/t fob north China ports. Bids from utilities were no higher than Yn618/t fob, although this was up slightly from Yn615/t yesterday.
China's futures market saw the Zhengzhou commodities exchange September contract close at Yn600.60/t today, down by Yn2.40/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