Indonesian coal prices hold steady

Indonesian physical thermal coal prices held steady today, but trade was at a near standstill as market participants waited for the results to emerge of a Chinese utility's tender to buy.

Chinese state-controlled utility Guodian yesterday issued a tender seeking 950,000t of various grades of mostly low-calorific value (CV) imported coal, all for delivery to its power plants in east China's Jiangsu province during 1 September-31 October. The tender closes on 16 August. Views are mixed on whether the tender will offer any support to prices, although the price at which cargoes are awarded could give the market some price direction heading into next week.

Bids and offers for geared vessels in the GAR 4,200 kcal/kg Indonesian market were relatively steady compared with yesterday, with most September shipments bid at around $30.50-31.50/t and offered around $31.50-32.50/t. Details of trades were slow to emerge, although a September-loading Panamax of this coal traded at $31.80/t. Panamaxes typically trade at a premium of around 50¢/t to $1/t compared with supramax shipments.

Trade was also thin in the ICI 4 coal derivatives market after September and October traded as a spread yesterday. These trades comprised a September sale at $32/t for 5,000t, balanced by an October sale for 5,000t at $31.70/t, revealing a 30¢/t backwardation between the months.

September ICI 4 derivatives were bid today at $31.50/t and offered at $32.20/t. This is in line with the last Argus assessed price for September at $32.05/t yesterday.

Elsewhere in the Indonesian market, a September-loading gearless Panamax GAR 5,000 kcal/kg cargo was bid at $46/t and offered at $47/t. By comparison, a September-loading Panamax GAR 5,000 kcal/kg cargo traded late last week at $47/t.

The Australian market saw an October-loading 75,000t NAR 6,000 kcal/kg cargo trade at $64.20/t fob Newcastle, down from last week's Argus assessment at $67.80/t on 8 August. By comparison, the most recent confirmed trade for October was at $68.25/t fob Newcastle last week.

The lower CV Australian market was quiet. Some Chinese buyers looking to cut costs were interested in NAR 5,100 kcal/kg coal, but that is irrelevant to the Argus index that has a minimum CV threshold of NAR 5,300 kcal/kg.

China's domestic spot market had NAR 5,500 kcal/kg coal bid at 580 yuan/t ($82.67/t) and offered at Yn585-590/t fob Qinhuangdao.

China's futures market saw the September contract on the Zhengzhou commodity exchange close at Yn579/t, edging up by Yn5.80/t from yesterday.