ICI 4 coal derivatives prices edge higher

A total of 30,000t of fourth-quarter 2019 ICI 4 derivatives contracts cleared on the CME today amid signs that the market was strengthening, in line with recent gains in low-calorific value (CV) Indonesian physical prices.

Today's ICI 4 contract trades comprised 10,000 t/month each for October, November and December and were cleared on the CME at $33.35/t, up from a similar trade yesterday for 30,000t of fourth-quarter 2019 contracts, which changed hands at $33.15/t. All of today's trades were brokered by Singapore-based Evolution. Today's trades mean that a total of 285,000t of ICI 4 futures have traded so far this month.

October ICI 4 contracts were bid at $32.25/t and offered at $33.10/t today, while fourth-quarter 2019 contracts were bid at $33.10/t and offered at $33.40/t. By comparison, the last Argus settlement price for October ICI 4 contracts was at $32.65/t yesterday, when fourth-quarter 2019 was at $33.15/t.

In the physical GAR 4,200 kcal/kg coal market, details of fresh deals began to emerge today but at marginally softer prices compared with similar transactions heard in the market yesterday. A few October-loading geared Supramax GAR 4,200 kcal/kg cargoes may have traded today at $32.50/t, after two October-loading cargoes of the same coal were heard to have changed hands at $32.75/t yesterday.

But the prices of the deals are broadly in line with the current $32.50-33.50/t bid-offer range for October-loading shipments, and also higher than similar transactions that concluded last week at $32/t.

The Australian market was quiet today.

The market earlier this week saw a trade at $63/t fob Newcastle on screen for a November Panamax of NAR 6,000 kcal/kg coal, and later offers at $63/t fob on screen and $62.75/t fob over the counter.

But interest in the supply of NAR 5,500 kcal/kg, which sells mainly to China, has remained limited because of concerns over import quotas.

In the China domestic market, prices of NAR 5,500 kcal/kg coal have remained relatively steady so far this week, with bids at around 580-585 yuan/t ($81.70-82.50/t) fob northern Chinese ports today and offers at Yn585-588/t.

In China's futures market, the November contract on the ZCE closed at Yn586/t today, down by Yn1.40/t from yesterday.