Not many thermal coal buyers are looking to conclude deals for imported material this week with Chinese Lunar New Year holidays approaching, sources said Monday.
"The delivery window before the Lunar New Year is closed," a source at a major international coal producer said.
A Beijing-based trader said he was only focused on performing December and January shipments he had booked earlier rather than procure any additional tonnages.
"My utility has nearly finished taking seaborne cargoes. They may take more domestic parcels, but not seaborne coal," he said.
Some 5,500 kcal/kg NAR domestic coal was heard being offered at Yuan 630/mt ($103.02/mt) FOB Qinhuangdao, including 17% value-added tax, according to a Shandong-based trader.
"There is potential for domestic coal prices to go higher before the end of the year," said the trader.
A mini-Capesize cargo of 5,500 kcal/kg NAR Australian thermal coal was heard sold at $84.25/mt CFR southern China for late-February delivery.
"The price [of $84.25/mt CFR] is pretty high, as China's February thermal coal market will probably soften," a Singapore-based trader said.
China's domestic 5,500 kcal/kg NAR thermal coal is currently transactable at about Yuan 610-620/mt or Yuan 521-530/mt without VAT, FOB Qinhuangdao Port, up by about Yuan 5 over the weekend.
"I would expect China's domestic thermal coal prices to rise slowly this week until the ongoing coal and electricity talks between coal miners and power plants come to a conclusion later this week or next week," the Beijing-based trader said.
At the close of Asia trade Monday, the Platts/Fenwei China Coal Index (CCI 1) for domestic thermal coal traded at Qinhuangdao port was assessed at Yuan 630/mt including VAT, up Yuan 2 from Friday's close.
Platts assessed the FOB Qinhuangdao 5,500 kcal/kg NAR coal for delivery in the next 7-45 days at Yuan 538/mt, up Yuan 2 from Friday. 'TOO RISKY'
Capesize cargoes of Australian 5,500 kcal/kg NAR coal were being offered at $72.50/mt FOB for February loading with bids coming in at $71/mt FOB, as heard through broker Marex Spectron.
On a landed basis, offers for February-loading cargoes were at $85/mt CFR south China, as heard through the same broker.
Some Capesize cargoes of 5,500 kcal/kg NAR Australian thermal coal were heard being offered at $85/mt CFR eastern or southern China for February and March delivery, according to a Fujian-based trader.
The trader was not interested in the offers as he did not expect huge demand for thermal coal after the Chinese New Year holiday.
"It's too risky booking the cargoes now. We can wait and see how the market goes when we come back from the holiday," he added.
Higher freight rates are currently deterring deals from going through, the major international coal producer source said.
Capesize freight rates have jumped to as high as $21.45/mt FOB from Richards Bay to South China, while Panamaxes are being quoted at about $26/mt on the same route and that has kept Chinese buyers away on the sidelines, he noted.
The CFR South China (CCI 8)price was assessed at $84.40/mt basis 5,500 kcal/kg NAR excluding Chinese VAT, down 20 cents from Friday.
Platts price assessment for cargoes of 5,500 kcal/kg NAR coal for arrival in south China ports in the next 15-60 days was at $84.65/mt CFR, down 20 cents from Friday.
Typical 20% ash Newcastle 5,500 kcal/kg NAR coal for loading in the next 7-45 days was assessed at $72/mt FOB, down 20 cents from Friday.