Singapore, 8 November (Argus) — Activity increased sharply in the
ICI4 thermal coal derivatives market today, with a total of 70,000t trading and
clearing on the CME.
Early in the trading day, a block of 20,000t of December contracts traded at
$35.90/t, while a 20,000t block of November contracts sold at the lower price
A total of 15,000t of November contracts traded at $34.75/t later in the
Asia-Pacific trading day, while several December trades amounting to 15,000t
were secured at $34.60/t and $35.90/t.
Todays trades mean that a total of just under 1.6mn t has been cleared by
the CME since the contract launched in February, after 265,000t cleared in
October, the highest yet for a single month. A total of 260,000t traded in
September, which was previously the highest monthly level.
Open interest in the contract stood at 210,000t as of late yesterday. This
was down from 320,000t late last month but up sharply compared with 190,000t on
Trade in the GAR 4,200 kcal/kg physical market was also brisk today, as
sellers continued to try and exit positions amid an increasingly weak price
outlook. This is leading to a sense of oversupply in the market at a time when
demand from main buyers China and India is also relatively weak. But a view is
starting to emerge that the market may now be nearing a floor following the
recent steep fall in prices. Fob prices of the actively traded GAR 4,200
kcal/kg grade of Indonesian coal have fallen by around 25pc since mid-June and
were last assessed by Argus at $35.51/t on 2 November, which was $1.53/t lower
than the previous week and the lowest since September 2016.
A series of deals involving GAR 4,200 kcal/kg trades emerged today, with
November-loading Panamax cargoes traded at $34.50/t. Panamax trades are not
captured in the Argus GAR 4,200 index, which only assesses geared supramax
cargoes for this type of coal, while November-loading cargoes also fall outside
the current 60-day December and January assessment window. A December-loading
geared supramax cargo of the same coal traded at $34.25/t, with a
November-loading shipment trading at the slightly lower price of $34/t. Other
trades involving November-loading supramaxes of slightly lower quality product
were done at the lower price of $33/t. Another November-loading Panamax trade
was done at $36/t, although the cargo had especially low sulphur levels and was
possibly able to command a premium.
The GAR 5,000 kcal/kg market saw November-loading Panamax cargoes being
offered at $50-50.50/t to China. Firm bids were scarce, although indications
from Chinese buyers were at around $48.50-49/t. Offers to Indian buyers were
lower than to Chinese buyers.
But a Panamax of slightly higher quality GAR 5,100 coal with 1.2pc sulphur
was bid earlier this week at $52.25/t for end-November loading with an offer at
The view that the market could start to stabilise soon is being fuelled by a
sense that Chinese demand could start to increase with the onset of lower
temperatures in parts of the country. This has helped to stabilise domestic
coal prices following two consecutive weeks of falls, with offers for NAR 5,500
kcal/kg product at 655-660/t yuan on a fob north China ports basis today,
although bids from utilities were no higher than Yn650/t. In Chinas futures
market, the Zhengzhou commodity exchanges January contract closed at
Yn623.40/t today, up by Yn3.60/t from yesterday.
The Australian market saw a screen trade involving a January-loading 50,000t
cargo of NAR 6,000 kcal/kg product traded at $106.50/t on a fob Newcastle basis
today. A fob Newcastle cargo of 25,000t for January loading was also sold on
screen yesterday at $108.10/t. Two screen trades involving this type of coal
were done yesterday for December loading, with 75,000t sold at $99/t and
25,000t sold at $103.25/t, both on a fob Newcastle basis. Only cargoes of
50,000t and above are considered large enough to be included in the Argus
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Posted by : admin [ 11/11/2018 11:18:00 PM ]