ICI 4 thermal coal derivatives tick higher

A total of 10,000t of December ICI 4 derivatives were cleared by the CME today at a slightly higher price than similar trades that concluded last week, as more signs emerged that physical prices of Indonesian GAR 4,200 kcal/kg (NAR 3,8900 kcal/kg) coal were starting to stabilise.

Today's 10,000t block of December contracts was brokered by Singapore-based Evolution at $30.50/t, which was up from similar trades last week when a total of 30,000t of December contracts was cleared on the exchange at $30-30.10/t. By comparison, December ICI 4 derivatives contracts traded last month as low as $29.50/t.

Activity in the ICI 4 derivatives market was relatively muted, despite today's trade, with 5,000t of December contracts bid at $30.35/t. Offers were scarce, although there were some enquiries for January and February offers, according to a Singapore-based broker.

By comparison, the bid-offer spread for December ICI 4 derivatives narrowed yesterday, with a bid at $30.40/t and an offer at $30.50/t.

Today's trade means that 45,000t of ICI 4 derivatives have cleared on the CME so far this month, taking the total volume cleared since the contract launched in February to around 1.75mn t. Around 185,000t of ICI 4 derivatives contracts traded in November. This was slower than September and October when the highest monthly volumes were cleared on the CME at 260,000t and 265,000t, respectively.

Trade in the Indonesian physical market was muted today, although there were further signs that the GAR 4,200 kcal/kg market may be stabilising amid a recent slight increase in enquiries for this type of material from Chinese and Indian buyers.

A trader had a firm bid for a cross-month late December/early January-loading Supramax GAR 4,200 kcal/kg cargo at $30/t, with another bid for a mid-January loading cargo of the same coal at $31/t. This may be a little firmer than yesterday when most bids for this type of coal were heard at $30/t, with offers above $30.50/t.

A cross-month late December/early January Supramax of GAR 4,200 kcal/kg coal was sold by a Chinese trader yesterday at $30/t. This compares with confirmed January trades last week for geared vessels in the $29-29.75/t region.

Argus last assessed GAR 4,200 kcal/kg prices on 7 December at $29.48/t, up by 75¢/t from the previous week.

At least two trades in the Australian coal market were confirmed for fob Newcastle January-loading cargoes. A 130,000t vessel sold today for $60/t, following a trade yesterday at $60.50/t for 75,000t.

A December-loading cargo — which Argus is no longer assessing — also traded at $58.75/t yesterday. It was a smaller 40,000t vessel, which would also make it ineligible for inclusion in the Argus index.

No other bids or offers were confirmed in the seaborne market.

In the China domestic market, NAR 5,500 kcal/kg coal was offered in the range of 620-630 yuan/t ($90-91/t) fob northern China ports, slightly elevated from yesterday, when the highest offers reported were around Yn625/t. Bids remained below Yn620/t.

In China's futures market, the January ZCE contract closed at Yn614/t, down by Yn1.6/t on the day. The May contract, which has been gaining volume recently, fell by Yn0.6/t to Yn566.20/t.