Chinese demand for both Newcastle and Indonesian thermal coal was quiet Tuesday with high stockpiles and low domestic prices, sources said.
The bid-offer spread has not narrowed and this is deterring deals, a Singapore-based source said.
A second Singapore-based trader reported FOB bids from Chinese buyers at $72-$72.50 for January- and February-loading cargoes of Newcastle 5,500 kcal/kg NAR coal, while offers were at $74.50-$76/mt.
"Offers are way too high for China," he said. "The market needs to come down to reflect Chinese demand."
He said last week three Capesize cargoes of Newcastle 5,500 kcal/kg NAR coal were reportedly traded at $75/mt FOB into South Korea, which is willing to pay higher prices than China.
An international trader said there was a firm bid for a January-loading, Panamax cargo of 5,500 kcal/kg NAR coal at $80/mt CFR while there was an offer for a 130,000 mt parcel at $86.50/mt CFR.
"Some [Chinese] utility customers have been beefing up their stocks for January-February deliveries," a Beijing-based trader said.
But China's industrial electricity consumption generally grinds to a halt during the Chinese New Year holidays in February and coal demand is expected to slump accordingly.
Platts assessed the FOB price of Newcastle 5,500 kcal/kg NAR thermal coal with typical ash of 20%, normalized from 17-23%, and for loading in the next 7-45 days at $73.70/mt, unchanged from Monday.
Bids from Chinese buyers for Newcastle 5,500 kcal/kg NAR coal with maximum ash of 23% stood at $83-$83.75/mt CFR with offers at $86/mt CFR.
Combined coal stocks at China's four major Bohai Sea ports stood at 17.189 million mt Sunday, up 5% week-on-week and rising for the seventh week in a row, Qinhuangdao Port data released Monday showed.
Prices of FOB Qinhuangdao 5,500 kcal/kg NAR coal stood at Yuan 615-620/mt ($98-99/mt) on Tuesday, down from Yuan 620-625/mt on Monday.
BIDS OUTSTRIPPED
A fourth Singapore-based broker said offers for various grades of coal, including 3,800 kcal/kg NAR and 5,000 kcal/kg NAR Kalimantan material, are now outstripping the number of bids from Chinese buyers, who continue to look for prompt cargoes rather than those further out on the curve.
Very few cargoes had been traded out of Indonesia into China so far, according to the source, who said there was still a $4-5/mt gap between bids and offers.
A parcel of 5,000 kcal/kg NAR Indonesian thermal coal is being offered to Chinese buyers at $63/mt FOB for late-December to January delivery, but a Guangdong-based trader is considering taking a Panamax cargo of this grade at a landed price no higher than $70/mt CFR, owing to falling freight rates.
Meanwhile, bids for prompt shipments of 4,700 kcal/kg NAR appeared to be bucking the trend, increasing by around 50 cents to $56/mt FOB, according to numerous sources, against offers of $56-58/mt FOB.
An Indonesia-based trader who was looking to ink a deal into China for this grade said the availability of material had dried up, making it difficult to conclude deals for the remainder of December or even early January.
Platts assessed the daily 90-day prices of FOB Kalimantan 5,900 kcal/kg GAR coal at $71.75/mt and 5,000 kcal/kg GAR coal at $56/mt, both unchanged on the day.
Platts also assessed the daily price of FOB Kalimantan 4,200 kcal/kg GAR coal for loading in the next 7-45 days at $38.60/mt, unchanged from Monday.
