More enquiries for prompt Indonesian coal

Thermal coal trade in Asia-Pacific remained slack following the week-long holiday in key market China, although there were reports of growing enquiries for late-October Indonesian cargoes.

Chinese businesses have been slow to re-enter the market following last week's holiday, although prices of most grades of thermal coal were little changed from yesterday.

Sellers of Indonesian coal reported enquiries from trading firms and southeast Asian buyers. An Asian trader reported several deals into the Philippines for GAR 5,600 kcal/kg cargoes concluded at $44-45/t for October-loading cargoes, although there were few details of firm transactions. Bids were heard for GAR 5,000 kcal/kg cargoes at $53.50-54.00/t for end-October Supramaxes, with no matching offers. Enquiries were heard from Vietnamese buyers for GAR 4,600 kcal/kg and GAR 4,700 kcal/kg cargoes. Bids for GAR 4,600 kcal/kg late-October loading cargoes were heard at $42.00-42.50/t, with offers in the range of $43-45/t. Offers for GAR 4,700 kcal/kg end-October loading cargoes were heard at $45-46/t, with bids at $40-43/t. In the GAR 4,200 kcal/kg physical market, offers for late-October cargoes were heard at $38.75-39.25/t, with bids around $38/t. November offers were heard at $39/t, with bids around $38.50/t.

The Asian paper market was slow, with no trades reported on ICI4 futures, which clear on the CME and settle against the Argus/Coalindo ICI4 physical coal index.

Open interest in the ICI4 derivatives market was at 175,000t at the end of trade yesterday, with the bid-offer spread little changed today. October bid at $38.75/t and offered at $39.15/t and November bid at $39/t and offered at an implied $40.40/t, with a Singapore-based broker. December was bid at $39/t and offered at $41.05/t, while fourth-quarter ICI4 derivatives were bid at $38.90/t and offered at $40.20/t.

Inter-month spreads were relatively wide, with October bid at a $1.50/t discount to November and offered at a 25¢/t discount to November. November was bid at a discount of $1/t to December, and offered at a 25¢/t premium to December.

The Australian NAR 5,500 kcal/kg market was also quieter. A bid for a December-loading Capesize cargo was heard at $66.50/t, with no matching offers. Elsewhere in the Australian market, a 25,000t cargo of NAR 6,000 kcal/kg coal for loading in November traded on screen after-hours yesterday at $112/t, lower than the trade concluded earlier yesterday at $112.45/t. Another 25,000t cargo of the same grade for loading in the first quarter of next year traded higher on screen today, at $113/t.

China's Zhengzhou commodity exchange reported the close of the main January 2019 thermal coal futures contract at 663 yuan/t today, up by Yn12.60/t on the day as a result of sustained import restrictions and maintenance at Daqin. China will retain limits on coal imports for the rest of this year, potentially supporting demand for domestic supply in the peak winter season.