Indonesian thermal coal prices witnessed a significant decline after traders returned from the Christmas holidays, pressured by a sharp price fall in recent tender results floated by Chinese utilities.
On 29 December, offers for 3,800 kcal/kg NAR thermal coal dropped to $94/t FOB for panamaxes, while supramax cargoes of this grade were mainly offered $1-2/t lower. Panamax shipping rates stood at $6.3/t on the trip from South Kalimantan to China’s Fujian province.
Traders reported some deals this week, including an early-January supramax 3,800 kcal/kg NAR cargo traded at $90/t FOB. “Tradable prices today will fall to $88-89/t,” a source said.
Before the Christmas holidays, panamax 3,800 kcal/kg NAR cargoes were offered at a $4.5/t premium to the index, whereas now the asking prices are at $1.5/t premium or flat, a Beijing-based trader said.
For 3,400 kcal/kg NAR, prevailing offers have slid to a $1-2/t premium from $3-4/t.
A state utility reportedly bought three 3,800 kcal/kg NAR cargoes via a tender issued on 27 December at RMB 783-788/t DDP plus VAT, which were about RMB 30-40/t lower than its previous tender issued a week ago.
In addition, the power company awarded four 3,000 kcal/kg NAR cargoes at RMB 525-557/t, one 3,400 kcal/kg NAR cargo at RMB 668/t, and a 4,700 kcal/kg NAR cargo at RMB 1,003/t.
On 30 December, a Guangxi-based power group was heard to have bought several imported cargoes via a tender, with 3,800 kcal/kg NAR coal awarded at RMB 777-783/t DDP plus VAT, compared with RMB 834.5-845/t on 21 December. Cargoes of 4,400 kcal/kg NAR coal were awarded at RMB 932-945/t. It also bought a 4,800 kcal/kg NAR cargo at RMB 1,045/t.
“The decline in utilities’ awarded prices is a result of the downward movement in the Chinese domestic market,” said a Zhejiang-based trader source. The Chinese market has seen a constant decline since mid-December, bringing the total decline in prices to RMB 200/t.
Concerns over an export restriction by Indonesia’s government had previously fuelled prices, but some traders noted that it was unlikely to happen in January as Indonesian miners had sufficient export quotas for the month.
On 30 December, Fenwei assessed Indonesian 3,800 kcal/kg NAR coal at $97/t CFR South China, down $3/t from the previous day; on FOB basis, this grade was assessed at $88.5/t, down $2.5/t on the day.
Indonesian 4,700 kcal/kg NAR thermal coal prices were assessed at $126.5/t CFR, down $2.5/t from the previous day.
Note: This article has been exchanged under the article exchange agreement between CoalMint and Sxcoal.
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