CFR South China 5500 coal price: Jun 6 – Sep 5, 2013
CFR South China market commentary
In Asia trade September 5, a late September-arrival Capesize cargo of Australian 5,500 kcal/kg NAR thermal coal was heard to have traded at $77.30/mt CFR South China, said market sources.
“The cargo was initially offered at $77.50/mt CFR South China, but later I heard it was sold at a price slightly lower than that,” a Guangdong-based trader said.
“Landed prices for international thermal coal may still have room to go down,” said a Singapore-based broker, adding that his belief was based on a retracement in seaborne freight for bulk commodity cargoes.
“The reason for the rise in Cape freights was iron ore [fixtures], but ocean freights seem to be stabilizing this week,” he said.
Commentary continue below...
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A Tianjing-based trader said he was talking with his supplier about booking a Panamax cargo of 5,500 kcal/kg NAR Australian coal at $77/mt CFR South China for delivery in October.
“It’s not easy to get this price for a Panamax cargo,” the trader said.
Offers for 5,500 kcal/kg NAR imported coal were heard in the market around $77-78/mt CFR South China for Capesize cargoes, the trader noted.
International traders contacted by Platts said they judged fair value for CFR cargoes of 5,500 kcal/kg NAR seaborne-traded thermal coal for delivery to South China in the next month or two to be around $77/mt, currently.
CFR South China 5,500 kcal/kg NAR cargoes from Australia were bid at $76.75/mt for September arrival to offers at $77.25/mt, and stable on-day, while October-arrival cargoes were bid and offered at $77.35-77.85/mt, and up 20 cents on day, as heard through broker Marex Spectron.
FOB Newcastle maximum 23% ash, 5,500 kcal/kg NAR cargoes for late September loading at the Australian port were bid at $64.65/mt, to offers at $65.15/mt, down 10 cents on-day, according to the broker.
October-loading cargoes of high ash thermal coal at Newcastle port were bid and offered at $64.25-64.75/mt, and 60 cents lower from the September 4 Asian trading session, said Marex Spectron.
Indonesian sellers unworried by China’s customs tariff
China's decision to impose a 3% tax on imports of lower-grade thermal coal is not expected to have a major impact on Indonesian coal miners, as there is a trade agreement in place between the two countries, several market sources said.
"[China's decision] will not affect Indonesia. They have signed a free trade agreement with the Chinese government. Any imports will draw no tax upon presentation of Form E [the certificate of origin]," a Hong Kong-based trader said.
An Indonesia-based trader said it was becoming difficult to sell coal to China at the moment as Chinese domestic prices were still weak.
"There is no business now. I am just talking to a few [Indonesian] miners and they are all looking to cut costs as India and China are away," he added. "However, miners do not want to lower their prices."
Chinese buyers were willing to pay only about $38-39/mt FOB for prompt-loading cargoes of 3,800 kcal/kg GAR coal, while there were several offers from Indonesian suppliers at $41-41.50/mt FOB, he said.
On a delivered basis, a Singapore-based trader noted that Chinese buyers were looking to pay about $48/mt CFR South China for Supramax cargoes of this grade, which nets back to about $39/mt FOB after deducting Supramax freight rates.
A Guangdong-based trader said he had booked a Panamax cargo of 4,500 kcal/kg NAR Indonesian thermal coal at $56/mt FOB, or $63/mt CFR on a delivered price basis for arrival into South China in September.
The same trader also bought some 60,000 mt of domestic 4,300 kcal/kg NAR thermal coal at Yuan 323/mt FOB Qinhuangdao without VAT, or Yuan 444/mt CFR Guangzhou port in South China without VAT for immediate delivery.
Some geared cargoes of 4,800 kcal/kg NAR blended Indonesian coal were offered at $56/mt FOB for delivery in September/October, for which counter bids were not immediately available, according to a Shanghai-based trader.
The Chinese trader said he had recently booked some 5,000 kcal/kg NAR Indonesian coal and was given the option of paying $60/mt FOB for a geared Supramax cargo, or $62/mt FOB for a gearless Panamax cargo for delivery to South China in October.
“It was so hard to get this price. I did my best to minimize the risk,” the trader said.
In comparison, some 5,000 kcal/kg NAR China domestic coal from a large producer was heard offered at Yuan 380/mt ex-VAT, Yuan 10/mt lower from the week ended August 30, according to a Beijing-based trader.
The trader believed coal of the same grade from smaller producers was available at Yuan 376/mt, or $61/mt ex-VAT FOB Qinhuangdao.
Rising freight rates were deterring deals from going through, the Indonesia-based trader said, adding that Indonesian miners were still offering Supramax cargoes of 5,500 kcal/kg NAR coal at about $68-69/mt FOB.
Chinese buyers are willing to pay a maximum of $77.50/mt CFR South China for such cargoes, he said, adding that suppliers of Australian 5,500 kcal/kg NAR coal were offering cargoes at $65/mt FOB.
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