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Newcastle price hits fresh 6-month low

The Asia-Pacific benchmark Newcastle index has fallen to fresh six-month lows amid subdued Chinese import demand, participants said on Thursday.

Broker Global Coal’s benchmark Newcastle [Australia] index was assessed last at USD 102.84/t, down by 2.1% on the week and the lowest level since early-May.

“There has not been any significant change to the Chinese demand outlook,” said a coal analyst with a trading firm, adding Chinese coal futures prices had also been weak “for the past two weeks”.

China’s Zhengzhou front-month thermal coal futures contract settled last 2% lower on the week at a two-month low – on a rolling basis – of CNY 622.40/t (USD 89.80/t).

“But one potentially bullish factor is that we are closer to the widespread heating period, [which begins in ] mid-November,” the analyst said.

Montel reported earlier Chinese coal and lignite imports fell by 11% on the month in October to a five-month low of 744,000t/day.

Market participants attributed the decline – and the ongoing dearth in Chinese buying activity – to the fact that many buyers had already reached their government-imposed annual import quotas.

New quotas
“They will not return until January, when the new quotas for imports begin,” said a Singapore-based coal trader, adding however some buyers may stand back from the market until after Chinese New Year, in early February.

Yet others may begin purchasing cargoes for January arrival as early as December, the trader said.

“I have active enquiries from China, so there is some buying, but mainly for low-calorific value [Indonesian] coal,” he said.

One analyst, with an energy firm, meanwhile pointed to high stocks at Chinese coal-fired plants, due in part to relatively mild weather across the region, coupled with lower prices for competing gas in Asia.

Elsewhere, many Indian traders were away from their desks this week due to the Diwali holiday on Wednesday.

Price indicators (week on week change):
Global Coal Newcastle index – USD 102.84/t (USD -2.21)
Global Coal Richards Bay index – USD 97.28/t (USD -0.51)
Zhengzhou (ZC) thermal coal futures, January contract – CNY 622.40/t (CNY -12.60)

Stocks and Queues:
PWCS Newcastle (Australia) stocks – 1.52m tonnes (0.08m tonnes)
PWCS vessel queue – 5 vessels (1 vessel)
Indian power plant stocks – 10.3m tonnes (0.3m tonnes)
Indian power plant stocks in days – 6 (unchanged)
Source: Montel

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