Asia thermal coal (CCI 7&8): CCI 8 down on Chinese import restrictions

2014-09-17

Bearish sentiment swept across the Chinese market following the import restrictions reported Monday, with bids and offers reported lower, sources said Tuesday.

An October-delivered mini-Capesize cargo of 5,500 kcal/kg NAR Australian thermal coal was heard offered at $55.80/mt FOB or some $68/mt CFR southern China but has yet to meet any solid bid. This compares to offer prices of about $56-57/mt FOB for similar material back in early September.

An Australia-based buyer said he had received offers that ranged from $55-55.60/mt FOB for October-loading Capesize cargoes. He said indicative Chinese bids were at $65/mt CFR south China basis.

A mini-Capesize cargo of Australian 5,500 kcal/kg NAR for October delivery was heard traded at $55/mt FOB or around $67-67.50/mt CFR south China, a China-based source said.

The Platts/Fenwei CCI 8 price for 5,500 kcal/kg NAR thermal coal was assessed Tuesday at $67.25/mt, excluding Chinese VAT, down 25 cents on the day.

A Singapore-based trader said the lower buying interest was a reaction to the import restrictions reported Monday, as well as the cuts in imports of power utilities as directed by China’s National Development and Reform Commission (NDRC).

“Producers and traders are bearish on China,” he said, noting that with the Chinese government discouraging imports of coal, sellers would have to find a market that could absorb their tonnages.

Platts assessed the FOB price of Newcastle 5,500 kcal/kg NAR thermal coal with typical ash of 20% at $56.50/mt, down 50 cents on the day.

The market for imported 4,700 kcal/kg NAR was also not looking positive, as the NDRC’s directive among power plants to reduce their imports curbed buying appetite, sources said.

“It’s from the NDRC and we have to follow,” an Indonesia-based source from a Chinese power utility said, adding his company has to cut its imports by 1.7 million mt for the rest of the year.

He said offer price for a Panamax cargo of Indonesian 4,700 kcal/kg NAR for October loading was $50.50-51/mt FOB.

A China-based trader said he heard a major Indonesian miner conclude a sale of a Panamax cargo of Indonesian 4,700 kcal/kg NAR for loading in the second half of October at $50/mt FOB to a Chinese end user. He placed the Panamax freight rate from East Kalimantan to south China at $6.25-6.50/mt.

Imported 4,700 kcal/kg NAR cargoes, however, have met tough competition from domestic coal, as utility customers now prefer to take domestic 5,000 kcal/kg NAR, according to a Beijing-based trader.

The CFR South China CCI 7 price for imported cargoes of 4,700 kcal/kg NAR thermal coal was assessed at $56.60/mt, down 30 cents on the day.

Sources said China’s domestic 5,000 kcal/kg NAR thermal coal was transactable at Yuan 410-420/mt or Yuan 350-359/mt without VAT FOB Qinhuangdao Port, stable over the week. Trades were heard at Yuan 415-420/mt. For domestic 5,500 kcal/kg NAR, transactions were heard at Yuan 475-480/mt.

The Platts/Fenwei CCI 2 price for domestic 5,000 kcal/kg NAR thermal coal for delivery at Qinhuangdao port in the next 7-45 days was assessed at Yuan 415/mt FOB, steady on the day.

Platts/Fenwei China Coal Index (CCI 1) for domestic thermal coal traded at Qinhuangdao port was assessed at Yuan 476.50/mt inclusive of VAT, up Yuan 1 on the day.

Source from : Platts

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