Indonesian thermal coal prices hold steady

Indonesian thermal coal prices held relatively steady today, with details of physical trades emerging at similar levels to recent transactions. In the ICI 4 derivatives market, a 10,000t block of December contracts traded at a similar price to deals that were concluded yesterday.

Today's 10,000t block of ICI 4 derivatives changed hands at $29.50/t, brokered by Singapore-based Evolution. By comparison, a total of 20,000t of December contracts traded yesterday, of which 15,000t also traded at $29.50/t while a 5,000t block was sold at the slightly higher price of $29.75/t.

Earlier, 10,000t of December contracts traded on 20 November at the higher price of $30.50/t. The latest trades mean that just under 1.7mn t has been cleared on the CME since the contract launched in February.

A total of 170,000t of ICI 4 derivatives contracts have traded so far this month. The highest monthly volumes to date were traded in September and October, when 260,000t and 265,000t respectively cleared on the CME.

In the GAR 4,200 kcal/kg physical market, a December-loading geared supramax cargo changed hands at $29/t, with another December-loading cargo trading at the higher price of $31/t. The exact loading dates of these shipments is unclear, although the market is currently in contango and late-December loading shipments are commanding a slight premium to early-December loading cargoes. Prompter-loading cargoes of this coal are currently at a discount, as sellers of shipments that are destined for China struggle to reschedule loading dates amid concerns that last week's announcement of tighter import restrictions could result in buyers defaulting on cargoes.

Unconfirmed details began to emerge yesterday that two early-December loading geared supramax cargoes of GAR 4,200 kcal/kg coal may have traded at $29/t and $29.50/t respectively. Argus last assessed GAR 4,200 kcal/kg prices at $32.04/t on 16 November, which was $2.48/t lower than the previous week.

Elsewhere in the Indonesian coal market, a fob GAR 3,400 kcal/kg December-loading supramax cargo traded at $19.50/t, while an offer for a December-loading supramax cargo of the same coal was heard at $20/t. Prices of this coal are coming under pressure because the recent steep fall in prices of higher calorific value (CV) product means that these grades are now better value on a heat basis compared with lower-CV product. A December-loading geared supramax cargo changed hands last week at $21.50/t, while Argus last assessed prices of this coal on 16 November at $21.46/t, which was down by 62¢/t compared with a week earlier.

In the Chinese market, offers of domestic NAR 5,500 kcal/kg coal were unchanged from yesterday at 630-635/t yuan on a fob north China basis. Bids from utilities were no higher than Yn625/t, which was also unchanged from yesterday. In China's futures market, the Zhengzhou commodity exchange's January contract closed at Yn618.20/t, down by Yn0.20/t from yesterday.

In the South African coal market, a trader reported concluding a deal for a NAR 5,500 kcal/kg cargo loading out of Richards Bay at minus $27/t to the Argus index for a December-loading cargo. Argus last assessed fob Richards Bay NAR 5,500 kcal/kg prices at $61.07/t on 16 November, which was down sharply by $6.61/t from the previous week.