ICI 4 derivatives trade crosses 2mn t mark

Bids and offers in the ICI 4 derivatives market started the week steady in a thinly traded market, after a total of 60,000t traded last week to take the total volume cleared by the CME since the contact launched early last year past the 2mn t threshold.

Both the physical and derivatives markets were quiet today, with the start of the week-long lunar new year holiday in China, dampening trade. There are also public holidays in several other Asia-Pacific countries to mark the lunar new year this week, including a two-day public holiday in the regional trading hub of Singapore tomorrow and 6 February.

Bids and offers in the ICI 4 derivatives market were fairly steady with February and March contracts bid at $34.50/t and $35.30/t respectively. February contracts were offered at $35.30/t with March offered at $35.50/t. By comparison, February bids were reported last week by Singapore-based brokers at $34.75-34.85/t, with offers around $35.35-35.50/t. Bids on March futures were reported at around $34.35-34.50/t with offers at $35.85/t.

Of last week's ICI 4 derivatives trades, a 15,000t February clip traded on 28 January at $35.55/t. This was followed by four 5,000t February clips the following day, which cleared at $35.00-35.10/t. A total of 25,000t of March ICI 4 derivatives contracts traded today, with 5,000t done at $35/t and another 20,000t trading at the same price. A total of 230,000t of ICI 4 derivatives contracts traded in January, the sixth time a monthly volume has exceeded 200,000t.

Prices in the physical market were holding steady compared with late last week, with trade getting off to an especially slow start to the week because of the absence of Chinese market participants. Suppliers reported a few enquiries from India, with a bid for a February-loading Panamax GAR 4,200 kcal/kg (NAR 3,800 kcal/kg) at $35.50/t against an offer at $36/t. Argus does not include Panamax vessels in the index for this type of coal.

By comparison, a February-loading geared supramax cargo traded last week at $34.50/t, while a cross-month late February/early March shipment traded at the lower price of $33.85/t. An early March-loading supramax cargo of the same coal traded at $34/t, while another March-loading cargo traded at $35/t.

Argus last assessed fob GAR 4,200 kcal/kg prices on 1 February at $34.29/t, an increase of 54¢/t compared with the previous week.

A producer in the low-calorific value market sold six cargoes of NAR 3,600 kcal/kg product over the weekend to China at $28/t for February-loading supramax vessels. By comparison, trades involving slightly lower quality GAR 3,400 kcal/kg (NAR 3,000 kcal/kg) coal were done late last week at $20-20.50/t. Argus last assessed prices of this product on 1 February at $21.22/t, up by 78¢/t from the previous week.

The Australian market is also likely to be quiet this week because of the absence of Chinese buyers.

Australian high-ash coal prices dropped toward the end of last week amid concerns that the Chinese government could be cracking down on imports again, by slowing the clearance of Australian cargoes through some northern and southern ports.

The NAR 5,500 kcal/kg market fell by 92¢/t to $61.91/t fob Newcastle over the week to 1 February as perceptions developed that the Chinese authorities are trying to convey informally that Australian coal flows will be curbed through its ports. The scope of any possible restrictions remains unclear and most participants have not received written or verbal government notices confirming this.