Prices edge lower for 4Q ICI 4 coal derivatives

Fourth-quarter 2019 ICI 4 derivatives contracts cleared on the Chicago Mercantile Exchange (CME) again today, although the price was slightly down from a similar deal earlier this week.

A total of 15,000t traded today, with 5,000 t/month for October, November and December done at $38.20/t and brokered by Singapore-based Evolution. By comparison, a total of 15,000t of fourth-quarter 2019 ICI 4 derivatives traded on 7 May at the higher price of $38.40/t.

Bids and offers on the prompter ICI 4 outright months were slightly higher today. May was bid at $39.50/t compared with $39.30/t yesterday and offered at $39.80/t, up from $39.70/t yesterday.

July and August bids and offers were only 5-10¢/t higher than yesterday. July was bid today at $38.45/t and offered at $40.35/t. August in turn was bid at $37.90/t and offered at $40.25/t.

Third-quarter 2019 was bid today at $37.90/t and offered at $40.30/t, both 5¢/t higher than yesterday.

Bids and offers were unchanged from yesterday on the intermonth spreads. July was bid at a 15¢/t discount to August and offered at a 65¢/t premium, while August was also bid at a 15¢/t discount to September and offered at a 65¢/t premium. Third-quarter 2019 was bid at a 45¢/t discount to fourth-quarter 2019 and offered at a $1.95/t premium.

Today's ICI 4 trade means that 65,000t has traded so far this week, taking the total volume for May so far to 85,000t.

Trade in the physical market was muted, with high offer prices deterring buyers, while most sellers appear unwilling to lower their expectations. June-loading geared supramax GAR 4,200 kcal/kg cargoes were mostly bid at around $39-39.50/t and offered at $40-41/t, which was unchanged from yesterday.

Argus last assessed fob Indonesia GAR 4,200 kcal/kg prices on 3 May at $38.93/t, up by 59¢/t from a week earlier.

The Australian market saw a June-loading Capesize cargo of NAR 5,500 kcal/kg coal trade at $60.40/t fob Newcastle, although this could not immediately be confirmed. This would be down slightly from last week's fob Newcastle assessment on 3 May at $61.08/t. But bids and offers remained limited.

The Chinese domestic market saw offers of domestic coal at 620-622 yuan/t fob north China ports today, dipping from Yn620-625/t earlier this week. Bids were sparse given adequate utility stocks and slower coal consumption. This compared with the most recent Argus assessment of Yn619.67/t ($91.77/t) fob Qinhuangdao on 26 April. Chinese markets were closed over 1-3 May for a public holiday.

The Chinese futures market saw the Zhengzhou commodity exchange September contract close at Yn598.40/t, down by Yn0.80/t from yesterday.