ICI 4 coal derivatives prices tick higher

A total of 65,000t of ICI 4 derivatives contracts cleared on the CME today, amid signs that the market is firming despite weakness in the Indonesian physical market.

Two 5,000t August and two 5,000t September contracts traded at the same time in a strip trade, all at $34.10/t and brokered by Singapore-based Evolution. These traded at a higher price than the Argus-assessed settlement prices for these months yesterday, when August finished at $33.65/t and September at $33.50/t.

Later in the day a 5,000t September clip traded slightly higher at $34.20/t, brokered by Singapore-based GFI. This was followed by a fourth-quarter 2019 trade of 5,000 t/month for October, November and December at $34.15/t, brokered by GFI. This was up from yesterday's Argus fourth-quarter settlement price of $33.55/t.

Another fourth-quarter 2019 trade concluded after that, with 5,000 t/month for October, November and December brokered by Evolution at $34.20/t. This was followed by two 5,000t August clips at $34.20/t, also brokered by Evolution.

In terms of bids and offers, September ICI 4 derivatives were bid at $34.20/t and offered at $34.50/t. Fourth-quarter 2019 contracts were bid at $34.15/t and offered at $34.50/t.

Although ICI 4 derivatives prices ticked higher, there were further signs that the Indonesian physical market was diverging slightly from the paper market by continuing to soften amid uncertainty about Chinese import policy in the coming months.

Most bids for physical fob Indonesia August-loading geared Supramax GAR 4,200 kcal/kg cargoes were in a $33-33.50/t range, compared with $33-34/t yesterday. Most offers for August-loading Supramax cargoes of this coal were in a $33.50-34/t range, compared with $34.25-35/t yesterday.

Prices in the Australian thermal coal market continued to ease on pessimism surrounding tighter controls on coal imports at some ports in China.

An August-loading Capesize or Panamax cargo of NAR 5,500 kcal/kg coal was offered at $50/t fob Newcastle. Argus last assessed this market at $52.47/t on 19 July.

The Chinese domestic market was largely steady. Combined coal consumption at the six major coastal power plants fell slightly to 664,000t yesterday, from 667,000t the previous day. Combined stocks at the plants fell to 17.53mn t, from 17.62mn t the previous day, equating to 26 days of consumption.

The actively traded September thermal coal futures contract on the ZCE closed at 593 yuan/t ($86.20/t), up by Yn6.8/t from yesterday.