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ICI 4 coal derivatives trade picks up

Activity in the ICI 4 derivatives market increased again today after a relatively slow start to the month last week, with another 25,000t cleared on the CME after 20,000t traded yesterday.

The prices at which today's trades were concluded were also higher than yesterday. Two 10,000t clips of April ICI 4 derivatives contracts traded today at $37.70/t, with a 10,000t clip and 5,000t clip of May contracts trading later at the same price. Today's trades were brokered by Singapore-based Evolution. By comparison, a total of 20,000t traded yesterday in two 10,000t clips. The first of these was for April and was done at $37.60/t, with the second done at $37.65/t for May.

Bids and offers have also crept higher compared with yesterday. April ICI 4 contracts were bid today at $37.25/t, up from $37/t yesterday, while May was bid at $37.25/t and offered at $38.25/t, up from an offer at $38/t yesterday.

Today's trades mean that more than 3.2mn t of ICI 4 contracts have been cleared on the CME since the contract launched in February last year.

Physical prices of low-calorific value Indonesian thermal coal were holding relatively steady to slightly firmer compared with yesterday, with most buyers' and sellers' price ideas largely within a $37-39/t range. A late April-loading geared Supramax GAR 4,200 kcal/kg cargo traded late last night at $38/t, which was unchanged compared with similar trades that were concluded earlier this week. A May-loading geared Supramax cargo of the same coal may have traded at the higher price of $38.50/t, although this could not be immediately confirmed.

In terms of bids and offers, a seller reported receiving a bid for a May-loading geared Supramax GAR 4,200 kcal/kg cargo today at $38/t. May-loading Panamax cargoes of this coal were offered in a $39-39.50/t range, although Argus does not include this vessel size in the index for this type of coal.

In the Australian thermal coal market, a 25,000t clip of NAR 6,000 kcal/kg coal for loading in July traded on screen at $90.50/t on a fob Newcastle basis, although that is not relevant to the Argus index. This market has been especially volatile lately, with a 25,000t clip of this coal for loading in May trading on screen yesterday at $79/t, which was up from a May-loading 25,000t trade that was done at $70/t on 5 April. A 25,000t July trade was also concluded on 5 April at $82/t.

In the high-ash Australian market, a June-loading Capesize cargo of NAR 5,500 kcal/kg coal was offered at $60/t fob Newcastle and bid at $57/t.

Chinese traders also appear increasingly interested in Colombian coal, which competes with Australian product in terms of quality but has not been a mainstay of the Chinese market to date. A Chinese trader was heard to have bought at least two late-April or early-May loading cargoes of Colombian coal on a fob basis. The specific price level could not immediately be confirmed but was understood to be equivalent to around $67-68/t cfr China. Another Chinese trader was also heard to have sold a Capesize cargo of Colombian NAR 6,000 coal kcal/kg coal at $74/t cfr China.

In the Chinese domestic market, NAR 5,500 kcal/kg coal is being offered at 630-640 yuan/t ($94-95/t) on a fob northern China ports basis. Utilities were bidding for this type of coal at close to Yn630/t.

In the China's futures market, the ZCE's May contract closed at Yn618.40/t today, up by Yn1.80/t from yesterday.

News No: 4301
Date: 2019/04/10 - 22:15
News Source: Argus Media

coal  trade  CME  China port  Colombian 

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