Home / Commodities / Freight News / Chinese, Indian buyers sit out amid tight thermal coal supply

Chinese, Indian buyers sit out amid tight thermal coal supply

Seaborne thermal coal buyers in China and India stayed largely on the sidelines while waiting for further price corrections amid tight supply, market sources said.

A China-based trader said that domestic Chinese prices are mostly stable, as demand is rising, but supply at China’s northern ports are increasing even with environmental checks.
He said that many market participants were waiting for Chinese state-owned miner Shenhua to announce its July monthly contract prices.

Yet, he added there were some delays to the announcement as Shenhua may be working it out with the National Development and Reform Commission, Beijing’s top economic policy agency.

Another China-based trader commented that the Asian seaborne market for thermal coal were relatively quiet in a truncated trading session Monday.

Market sources said that domestic coal prices at China’s northern ports were steady, with Qinhuangdao 5,500 kcal/kg NAR spot levels trading around Yuan 670-680/mt FOB.

An India-based trader said that Indian demand was slowly picking up after the government’s nod for utilities to import. “There is severe shortfall of coal in northern India. However, in the southern side, hydro and wind power is expected to pick up significantly,” he added.

He noted that vessel queue was building up on the east coast of India, and it is hard to move coal from ports to power plants due to logistics issues.

Offers for geared vessel cargoes of 4,200 kcal/kg GAR for July were at $49-$50/mt FOB, while the critical price point for a power plant was not more than $45/mt FOB.

He also heard offers for 3,800 kcal/kg GAR at $40/mt FOB geared vessel for July, while bid was at $37/mt FOB.

An Indonesia-based trader said that some of the shippers were trying to export coal without proper licenses in place and those shipments had been put on hold by customs.

However, since the volume was big, some impact would be seen in the coming days on supply as well as prices, he added.

An Indonesia-based producer said that rains were impacting production in South Kalimantan, but the weather was not as bad as in Sumatra.

HIGH STOCKS IN VIETNAM

He said apart from the domestic market, he sold several tonnages to Vietnam. “Vietnam buyers are taking whatever they can get, and the buyers have stocked up so much that they have asked me to postpone the shipment by two weeks so that they can digest the existing stocks,” he added.

He said some offers for 3,400 kcal/kg GAR have come down to about $29/mt FOB.

Another Indonesia-based producer source noted that some of the shipments were reportedly held up by customs in East and South Kalimantan provinces due to some issues with the licenses, but this is “not something which is affecting everyone”.

With the breakdown in talks between Japanese utility Tohuku and Australian coal supplier Glencore on agreeing on a price, he said he was now talking to Japanese utilities about alternatives.

He said that some of the utilities had already agreed on a fixed price, while some were purchasing based on Newcastle index price.

While Japanese market participants wait for the fate of the Japanese reference price system to be decided, globalCOAL?s Newcastle contract for 6,000 kcal/kg NAR thermal coal traded during Asian hours.

An August-loading 25,000 mt parcel traded at $116/mt FOB Newcastle basis 6,000 kcal/kg NAR, Monday on globalCOAL, and $3/mt lower than the last screen trade for an August shipment also for 25,000 mt of this Newcastle grade on June 18 at $119/mt.
Source: Platts

Leave a Reply

Your email address will not be published. Required fields are marked *

*

captcha

Please enter the CAPTCHA text

Recent Videos

Hellenic Shipping News Worldwide Online Daily Newspaper on Hellenic and International Shipping