ICI 4 coal derivatives prices strengthen

The ICI 4 thermal coal derivatives market showed further signs of strengthening, with a 15,000t March contract trading at a higher price to a similar transaction done earlier this week.

Todays trade was finalised at $38.55/t, brokered by Singapore-based Evolution. This was up from a 19 February trade, when a 10,000t March contract traded at $37.75/t. By comparison, March trades were done last week in a $34.40-35.50/t range. March ICI 4 contracts were bid today at $38.55/t, with April bid at $38/t. By comparison, a buyer bid at $37.25/t yesterday for 5,000t for March. This compared with a bid-offer range of $36.75-37.75/t on 19 February.

Todays trade means that 70,000t of ICI 4 derivatives contracts have traded so far this month, taking the total volume cleared on the CME since the contract launched last year to around 2.05mn t.

The Indonesian physical market also showed further signs of strengthening, with bad weather in parts of Kalimantan still disrupting vessel loading operations and curbing supplies.

A March-loading geared supramax cargo of GAR 4,200 kcal/kg material traded at $37.75/t. This was up from bids that started as low as $35.75 early in the week and rose to at least $37/t yesterday for March geared vessels.

A March-loading gearless Panamax cargo of the same coal was offered at the higher price of $39/t. This was well up from a trade at $37.50/t for a March Panamax early in the week and trades at $38/t yesterday. Argus does not accept Panamax cargoes in the index for GAR 4,200 kcal/kg coal.

Elsewhere in the Indonesian market, GAR 5,000 kcal/kg product was offered at around $57-58/t for March-loading geared vessels, although Argus only accepts Panamax cargoes for the index for this type of coal. Bids from Indian buyers for March-loading shipments were at around $55/t. A market participant yesterday said he hoped to receive $58-59/t fob Indonesia for a March-loading Panamax of slightly higher quality GAR 5,100 kcal/kg coal.

The Australian high-ash coal market saw an April-loading Capesize cargo of NAR 5,500 kcal/kg coal bid at $60/t and offered at $61/t fob Newcastle. Trading interest was otherwise remained limited.

North Chinas Dalian customs district possibly has set a quota for February-December 2019 at 12mn t for all varieties of imported coal. This is down from 14.9mnt of imports into Dalian in February-December 2017, though the general customs administration did not release official import figures for 2018. The news spurred some concern that Australian coal imports could be banned to help meet quotas for 2019, but there has been no official indication that that is being considered.

The higher calorific value market saw a 25,000t April cargo of NAR 6,000 kcal/kg coal offered at $93.50/t fob Newcastle yesterday and $94.50/t fob Newcastle today. But bids were scarce in the prompter market.

There was more interest in May-loading cargoes, which are currently at a premium to prompter supplies. A 25,000t May shipment of NAR 6,000 kcal/kg was bid at $95/t fob Newcastle and offered at $98.50-98.55/t fob yesterday and today. But Argus is not currently assessing May cargoes, while the 25,000t parcels are too small to fit the index.

Offers in the China domestic market of NAR 5,500 kcal/kg coal were steady at 610 yuan/t fob north China ports. Bids from utilities were no higher than Yn605/t.

Chinas futures market saw the Zhengzhou commodities exchange May contract closed at Yn585.6/t today, down by Yn2.40/t on the previous day.

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