A 50,000t ICI 4 thermal coal derivatives contract for February traded on the CME today, the single-largest trade cleared by the exchange since the contract launched early last year.
The previous single largest trade of 40,000t was cleared on the exchange in August 2018.
A total of 60,000t of ICI 4 derivatives traded today, with the 50,000t contract changing hands at $34.90/t and another 10,000t February contract trading at the higher price of $35.25/t. The prices at which today's trades were concluded were broadly in line with recent February trades, which have been cleared on the CME this week in a $35.05-35.10/t range. Bids and offers were also relatively steady, with January contracts bid at $31.80/t and offered at $32.25/t. February contracts were bid at $34.50/t, unchanged from yesterday, and offered at $35.50/t. This was up from $35.25/t yesterday.
The latest trades mean that 80,000t of ICI 4 derivatives contracts have traded so far this week, taking the total volume cleared on the CME so far this month to 165,000t and the total volume since the contract launched to around 1.95mn t.
Physical prices of Indonesian coal are still firm, despite demand from main buyer China beginning to taper off this week. Indian buyers are still in the market seeking GAR 5,000 kcal/kg (NAR 4,600 kcal/kg) and GAR 4,200 kcal/kg (NAR 3,800 kcal/kg) shipments and this is also supporting prices of these grades.
Demand from China has started to weaken, with most utilities now apparently covered ahead of next month's lunar new holiday. But bids from Chinese buyers that are still in the market for February-loading geared supramax GAR 4,200 kcal/kg cargoes remains firm, with most buying interest heard at $34-34.50/t. A bid for this type of coal was heard from an Indian buyer at the higher price of $34.75/t. Offers are around $36/t. A cross-month February/March-loading supramax cargo of this coal was heard to have changed hands in recent days at $34.75/t, which is up from a similar trade that was concluded on 22 January at $33/t. Other trades involving this type of coal and this vessel size have been concluded this week at $35/t.
The low calorific value (CV) Indonesian market has also been supported by a relatively large Chinese utility tender that was issued earlier this week. State-controlled utility Huaneng this week issued a tender seeking four cargoes of NAR 3,800 kcal/kg material and seven cargoes of NAR 4,800 kcal/kg or NAR 4,700 kcal/kg coal for loading in late February or early March, said one market participant. The cargoes must be delivered during March.
In addition, South Korean state-run utility Kospo recently awarded a tender to supply a total of 320,000t of NAR 3,800 kcal/kg and NAR 4,000 kcal/kg to Indonesian mining firms at around $35/t for the lower-CV coal and around $39/t for the higher-quality product.
In the mid-CV market, a February-loading geared supramax GAR 5,000 kcal/kg cargo was heard to have changed hands at $53/t, although Argus only includes larger Panamax cargoes in the index for this coal. By comparison, a slightly higher quality GAR 5,100 kcal/kg Panamax shipment was being offered earlier this week at $57/t. A recent surge in interest from Indian buyers for this type of coal has helped push up prices. Fob GAR 5,000 kcal/kg prices have increased by nearly 7pc since late December to $50.01/t as of 18 January.
In the Australian coal market, a March-loading Panamax cargo of NAR 5,500 kcal/kg coal traded at $63.50/t fob Newcastle today. That was up by $1/t from the traded level on 22 January. The cargo may have been heading to Korea for blending, given the higher price. Market participants put the tradeable level at closer to $63/t fob Newcastle today. Other trades were heard at $63/t fob Newcastle for a February Capesize cargo and at $63.50/t fob for a February Panamax, although these were not confirmed.
In the higher-CV market, a 50,000t February-loading cargo traded on-screen at $96/t fob Newcastle after-hours yesterday. That was down from a March trade done the previous day at $97/t fob Newcastle.
In the Chinese domestic market, most domestic NAR 5,500 kcal/kg coal was offered no higher than 595 yuan/t fob northern China ports today, compared with offers as high as Yn600/t fob late last week. Lower offer prices indicate a possible fall in prices since Argus' last assessment of Yn599.58/t ($88.36/t) fob Qinhuangdao on 18 January.
In China's futures market, the May contract on the ZCE closed at Yn569/t today, down by Yn7.6/t from yesterday.
