ASIA THERMAL COAL: Low Chinese buying weighs on Newcastle, Indonesian prices
Singapore (Platts)--11Dec2012/651 am EST/1151 GMT
Chinese demand for both Newcastle and Indonesian thermal coal was quiet
Tuesday with high stockpiles and low domestic prices, sources said.
The bid-offer spread has not narrowed and this is deterring deals, a
Singapore-based source said.
A second Singapore-based trader reported FOB bids from Chinese buyers at
$72-$72.50 for January- and February-loading cargoes of Newcastle 5,500
kcal/kg NAR coal, while offers were at $74.50-$76/mt.
"Offers are way too high for China," he said. "The market needs to come
down to reflect Chinese demand."
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He said last week three Capesize cargoes of Newcastle 5,500 kcal/kg NAR
coal were reportedly traded at $75/mt FOB into South Korea, which is willing
to pay higher prices than China.
An international trader said there was a firm bid for a January-loading,
Panamax cargo of 5,500 kcal/kg NAR coal at $80/mt CFR while there was an
offer for a 130,000 mt parcel at $86.50/mt CFR.
"Some [Chinese] utility customers have been beefing up their stocks for
January-February deliveries," a Beijing-based trader said.
But China's industrial electricity consumption generally grinds to a
halt during the Chinese New Year holidays in February and coal demand is
expected to slump accordingly.
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 days at $73.70/mt, unchanged from Monday.
Bids from Chinese buyers for Newcastle 5,500 kcal/kg NAR coal with
maximum ash of 23% stood at $83-$83.75/mt CFR with offers at $86/mt CFR.
Combined coal stocks at China's four major Bohai Sea ports stood at
17.189 million mt Sunday, up 5% week-on-week and rising for the seventh week
in a row, Qinhuangdao Port data released Monday showed.
Prices of FOB Qinhuangdao 5,500 kcal/kg NAR coal stood at Yuan
615-620/mt ($98-99/mt) on Tuesday, down from Yuan 620-625/mt on Monday.
A fourth Singapore-based broker said offers for various grades of
coal, including 3,800 kcal/kg NAR and 5,000 kcal/kg NAR Kalimantan material,
are now outstripping the number of bids from Chinese buyers, who continue to
look for prompt cargoes rather than those further out on the curve.
Very few cargoes had been traded out of Indonesia into China so far,
according to the source, who said there was still a $4-5/mt gap between
bids and offers.
A parcel of 5,000 kcal/kg NAR Indonesian thermal coal is being offered
to Chinese buyers at $63/mt FOB for late-December to January delivery, but a
Guangdong-based trader is considering taking a Panamax cargo of this grade at
a landed price no higher than $70/mt CFR, owing to falling freight rates.
Meanwhile, bids for prompt shipments of 4,700 kcal/kg NAR appeared to be
bucking the trend, increasing by around 50 cents to $56/mt FOB, according to
numerous sources, against offers of $56-58/mt FOB.
An Indonesia-based trader who was looking to ink a deal into China for
this grade said the availability of material had dried up, making it
difficult to conclude deals for the remainder of December or even early
Platts assessed the daily 90-day prices of FOB Kalimantan 5,900 kcal/kg
GAR coal at $71.75/mt and 5,000 kcal/kg GAR coal at $56/mt, both unchanged
on the day.
Platts also assessed the daily price of FOB Kalimantan 4,200 kcal/kg GAR
coal for loading in the next 7-45 days at $38.60/mt, unchanged from Monday.
--Deepak Kannan, firstname.lastname@example.org; Stephanie Wilson,
email@example.com; Reggie Le, firstname.lastname@example.org
--Edited by Jeremy Lovell, email@example.com