Indonesian thermal coal prices hold steady

Indonesian thermal coal prices were holding relatively steady, with activity still relatively light with most buyers and sellers opting for the market sidelines to gauge the market following China's lunar new year holiday last week.

Rain in parts of Kalimantan is still delaying vessel loading operations in some areas, although this is having little impact on the market because of sluggish demand.

In the actively-traded GAR 4,200 kcal/kg (NAR 3,800 kcal/kg) market, a late February loading geared supramax cargo was bid today at $34.50/t, although offers were scarce. By comparison yesterday, bids for March-loading cargoes of this coal were at around $34.25-34.50/t, with offers at around $35.50/t.

While trade in the physical market remained sluggish, a total of 10,000t of ICI 4 derivatives contracts traded today, with a 5,000t February clip trading at $34.50/t and a 5,000t March contract trading at the slightly lower price of $34.40/t. March in terms of bids and offers was bid at $34.25/t today and offered at $35.25/t. By comparison, February and March contracts were bid at $34.30/t and $33.10-34.25/t respectively yesterday. February contracts were offered at $34.85/t, with March offered higher at $35.90/t.

Today's trades means a total of 35,000t of ICI 4 derivatives contacts have been cleared on the CME so far this month, with more than 2mn t having traded since the contract launched in February last year.

Elsewhere in the Indonesian market, bids for GAR 5,000 kcal/kg (NAR 4,600 kcal/kg) coal were at $54/t for late February/early March loading Panamax shipments, with offers at around $55/t. A producer yesterday in the GAR 3,800/kcal/kg market sold three geared supramax cargoes for loading in late February/early March to China at $28.50/t.

The Australian coal market was largely steady. The only trade confirmed so far this week was an April-loading 25,000t parcel of NAR 6,000 kcal/kg coal that traded on screen at a 25¢ premium to the Newcastle index yesterday. But it was too small to be included in the index.

Australia's Ulan coal rail line, which connects New South Wales' Hunter valley coal fields with the Newcastle port, was to reopen today after a derailment nearly a week ago. Repairs were almost done as of midday, according to the owner and operator of the rail track. Some market participants previously said the incident could give prices a slight boost, even though the repair work was expected to take less than a week.

But the Australian coal market has largely been sidelined over the past week by the lunar new year holiday in China, combined with uncertainty surrounding a perception that China is working to slow the clearance of Australian cargoes into the country.

Some Australian producers possibly have lodged an official complaint with the Chinese government today over the trade issue, but no details were confirmed.

China's domestic spot market continued to hold steady. Offers of NAR 5,500 kcal/kg coal were at around 590 yuan/t fob north China ports. Many mines are still closed following the holiday, but demand remains weak because of slower industrial activity. Bids were scarce today.

The May contract closed at Yn579.60/t today, down by Yn1.60/t compared with yesterday.