Perth (Platts)--26Feb2013/627 am EST/1127 GMT

Buying interest stayed muted at south China's trading hubs for imported thermal coal Tuesday, and CFR delivered prices were rangebound at $86/mt and remain capped by competitively priced domestic thermal coal, traders said.

The Chinese spot market has lacked direction for several weeks, and international traders were hoping that a key meeting of the Chinese parliament next week could provide a fillip to demand.

The annual gathering of the National People's Congress in Beijing lasts from March 5-10 and is to discuss central government plans and policies for the coming year, including production targets for energy-intensive steel, cement and infrastructure sectors.

"End users will keep a close watch on the...meeting. It could have a big impact on steel and cement production and on power demand, which should provide some direction to the coal market," said one market participant.

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Traders in China said that although inquiries from local buyers had risen significantly in the immediate post-Lunar New Year period, actual physical demand for imported thermal coal had stayed low.

Offer prices for 5,500 kcal/kg NAR Australian thermal coal with maximum ash of 23% were quoted as high as $88/mt CFR China, but bidding interest from Chinese end users was no higher than $85/mt CFR, and was mostly around $84/mt CFR from traders.

A Singapore-based trader said Newcastle 5,500 kcal/kg NAR coal, with maximum ash of 23%, was being offered into the Chinese market at $75-76/mt FOB, but buying interest from China was stuck at $74/mt FOB.

Any offers above $76/mt FOB Newcastle would fail to elicit a response from Chinese buyers, he said.

In the over-the-counter market Tuesday, high ash cargoes of Australian thermal coal were heard bid at $74.75/mt for March loading to offers at $75.25/mt, and were bid at $75.25/mt to offers at $75.75/mt for April cargoes through broker Marex Spectron.

A second Singapore-based trader also said that not many bids and offers for Indonesian 5,500 kcal/kg NAR coal were being heard in the market this week.

"There is slim hope for deals of overseas coal to be done in the Chinese market due to the existing bid-offer spread of $2-3/mt for 5,500 kcal/kg NAR material," a Shanghai-based trader said.

"Chinese power plants have yet to see their coal consumption increase immediately after the holidays," he added.

Available stocks at Chinese power plants remain relatively high for the time of year, and have further pressurized Chinese coal prices, with 5,500 kcal/kg NAR domestic coal trading at Qinhuangdao port at about Yuan 521/mt FOB, ($82.50/mt) excluding 17% value-added tax, said market sources in China.

South African 5,500 kcal/kg NAR was keenly priced in the Chinese market, with offers heard at a discount of $6.50 to Richards Bay 6,000 kcal/kg NAR prices which were trading at $86.50/mt for April swaps, Tuesday.

Adjusting for calorific value, Richards Bay 5,500 kcal/kg NAR thermal coal would be priced at $73/mt FOB, which was $2 lower than comparable calorific value Newcastle thermal coal.

Delivered prices for South African 5,500 kcal/kg NAR coal were quoted in the market at $85-86/mt CFR China, including $12.50/mt for Capesize vessel freight.

In the Newcastle 6,000 kcal/kg NAR market, an April-loading parcel of 25,000 mt traded onscreen early in the Asian trading window Tuesday at $93/mt FOB, and followed four Newcastle 6,000 kcal/kg NAR screen trades Monday.

Two of these screen trades were each for April parcels at $94.25/mt FOB Newcastle, and two June-loading parcels traded at $93.25/mt and $94/mt respectively.

Platts assessed the FOB price of Newcastle 5,500 kcal/kg NAR thermal coal with typical ash of 20%, normalized from 17-23% and for loading in the next 7-45 day period at $76.50/mt, unchanged day-on-day.

INDONESIAN 5,500 NAR SOUGHT FOR TERM DEAL

A power plant in China was in the market to procure 150,000 mt/month of Indonesian 5,500 kcal/kg NAR thermal coal under an annual contract, but the Chinese utility's price indications were not immediately available, said an Indian trader, who had received the interest from the Chinese company.

A Singapore-based trader said there was a disparity in pricing between small to mid-sized miners and major Indonesian producers for similar grades of coal.

He said that major miners were seeking a premium of $1-2/mt for a cargo, while small to mid-sized miners were offering similar cargoes at a discount to current market prices.

A medium-sized miner, producing around 4 million-5 million mt/month, was selling 5,900 kcal/kg GAR coal to Japanese buyers at $84/mt FOB, he said.

"I wonder who's going to buy at those levels in China and India," he added.

A Supramax cargo of 4,000 kcal/kg GAR Indonesian coal was reported sold into South China at $43/mt FOB for March delivery.

The Shanghai-based trader said the price was about $2-3/mt above current market prices.

Indonesian thermal coal for delivery in the next 90-days was assessed at $76/mt FOB for 5,900 kcal/kg gross-as-received product, and 5,000 kcal/kg GAR Indonesian thermal coal was assessed at $60.15/mt FOB, and both price assessments were stable day-on-day.

Indonesian thermal coal with a calorific value of 4,200 kcal/kg GAR for loading in the next 7-45 days was assessed at $41.20/mt FOB, also unchanged.

--Mike Cooper, michael_cooper@platts.com
--Deepak Kannan, deepak_kannan@platts.com
--Reggie Le, newsdesk@platts.com
--Edited by Jonathan Dart, jonathan_dart@platts.com

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