Indonesian physical coal prices hold steady

Physical prices of Indonesian coal were holding relatively steady, although trade was limited because of the absence of Chinese buyers for the week-long lunar new year holidays.

Trading firms reported some enquiries from Indian buyers, which is helping to support prices of mid-calorific value (CV) product. Offers for March-loading shipments of GAR 5,000 kcal/kg (NAR 4,600 kcal/kg) coal were at around $56-57/t compared with bids at around $55-56/t, with buyers in Thailand also showing some interest in this type of material.

By comparison, a February-loading geared supramax GAR 5,000 kcal/kg cargo traded last week at $53/t, although Argus only includes larger Panamax cargoes in the index for this coal. A trading firm earlier last week was bidding for February-loading shipments of this type of coal at $51.50/t for a geared supramax vessel and at the higher price of $52/t for a February-loading Panamax cargo.

Argus last assessed prices of GAR 5,000 kcal/kg coal at $$52.61/t, an increase of 98¢/t from the previous week.

In the actively traded GAR 4,200 kcal/kg market, a trade involving a March-loading supramax vessel was done at $34.25/t. This price is broadly in line with similar trades that were done last week when a February-loading geared supramax cargo traded at $34.50/t, while a cross-month late February/early March shipment traded at the lower price of $33.85/t. An early March-loading supramax cargo of the same coal traded at $34/t, while another March-loading cargo traded at $35/t.

The ICI 4 derivatives market was also quiet with no trades. February ICI 4 contracts were bid at $34-34.25/t and offered at $35-35.25/t with Singapore-based brokers. March contracts were bid at $33-34/t and offered $35-35.50/t, while April contracts were bid at $33.50/t and offered at $36/t. Second-quarter 2019 contracts were bid at $33/t and offered at $36.50/t.

Bids and offers in the ICI 4 derivatives market before the two-day lunar new year public holiday in Singapore yesterday and on 5 February saw February and March contracts bid at $34.50/t and $35.30/t respectively. February contracts were offered at $35.30/t with March offered at $35.50/t.

A total of 230,000t of ICI 4 derivatives contracts traded in January, the sixth time a monthly volume has exceeded 200,000t.

The Australian market was mostly quiet because of the holiday in major buyer China. Just a few deals have been done this week for high-CV coal, which mainly sells to the Japanese market.

One index relevant cargo of NAR 6,000 kcal/kg Australian coal traded on screen on 5 February, with a 75,000t March-loading cargo that went for $96.75/t fob Newcastle. This was down from last week's assessed level for the high-CV market at $99.43/t fob Newcastle on 1 February. A smaller 25,000t April-loading parcel also went for $100/t fob Newcastle yesterday.

The Chinese market was silent as most businesses in the country are closed for the lunar new year holiday, as was trading on the Zhengzhou commodity exchange. This essentially brought activity in the high-ash seaborne market to a halt.

Trading firms waiting to see if they would be able to clear their cargoes into China after the concern over potential restrictions on Australian coal last week. But this likely will not become clear until next week at the earliest when normal operations resume.