Buying interest for imported cargoes of thermal coal was restricted to South African higher calorific coal in the Chinese spot market Thursday, market sources said.
Seaborne-traded thermal coal with a calorific value of 5,500 kcal/kg on a net-as-received basis for shipping to South China in the next 15-60 days was assessed by Platts at $82.75/mt CFR, Thursday, and stable for the fifth consecutive day.
Balanced against a lack of demand for April and May cargoes was thin selling interest as coal producers waited for an outcome to pivotal price talks for Japanese utility supply contracts for the year starting April 1.
Chinese buyers were heard bidding for April-arrival Capesize cargoes of South African 6,000 kcal/kg NAR coal at $90.50/mt CFR South China to offers at $91.25/mt CFR basis, and about $2 lower than a week ago, according to broker Marex Spectron.
Buyers in China appear to have reduced their interest in South African cargoes of 5,500 kcal/kg NAR Richards Bay thermal coal which have been trading around $71/mt FOB on a spot basis, and a cargo was heard sold a week ago at $83.50/mt CFR China.
Panamax cargoes of 6,100 kcal/kg NAR Ukraine origin thermal coal with 1.8% sulfur were heard offered in the Chinese market at $92-93/mt CFR for May and June delivery, to Chinese bids no higher than $90/mt CFR.
Ex-US Gulf 6,000 kcal/kg NAR thermal coal with higher sulfur content was still available in the Chinese market at $63-64/mt FOB, or $94-95/mt CFR for May and June arrival, but few buyers expressed any interested and their bids were $4-5/mt lower, said a Beijing trader.
Cheaper South African off-spec cargoes have been undercutting Australian high-ash cargoes on price.
One market participant in Singapore said he believed spot prices for Australian high-ash cargoes could fall by another $2-3/mt from around $72-73/mt FOB Newcastle on soft Chinese demand.
Platts assessed the FOB price of Newcastle at 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 $73.80/mt Thursday, steady from Wednesday.
Chinese buying interest for Indonesian 5,500 kcal/kg NAR coal was at $74/mt FOB on a gearless vessel basis, but miners were offering such cargoes at $75-76/mt FOB, said an Indonesia-based trader.
CHINESE COAL PRICES STEADY
Domestic thermal coal prices in China were steady Thursday at Yuan 512/mt ($81.55/mt) FOB at Qinhuangdao port, as intense competition continued between sellers.
Major Chinese miners like Shenhua Group and China National Coal Group have been competing fiercely on price and smaller coal miners with production costs of about Yuan 427-470/mt FOB Qinhuangdao Port for 4,500 kcal/kg NAR coal have been struggling to make ends meet, a Shanxi-based trader said.
Some smaller coal miners in Shanxi Province have suffered losses since January of some Yuan 20-30 per mt on the coal they produce, according to local market sources.
A Beijing-based trader said he saw only a slim hope of recovery in domestic thermal coal prices over the next couple of months. "Unless domestic coal miners slash their output, Chinese coal prices will not avert the current downturn," he added.
At Guangzhou port, domestic 5,000 kcal/kg NAR thermal coal was heard trading at Yuan 490/mt without VAT or port service fees on an ex-stockpile basis.
INDONESIAN SELLERS SHIFT TO DOMESTIC SALES
Some traders in Indonesian thermal coal have started to shift their focus to the domestic market where potential profit margins are higher compared with international sales, an Indonesia-based trader said.
A Chinese buyer was ready to buy two cargoes of 3,800 kcal/kg NAR Indonesian thermal coal a month, starting from April, at $41/mt FOB, but Indonesian miners were not offering such cargoes under $42/mt FOB, he added.
A Guangdong-based trader recently locked in three Panamax cargoes of 3,800 kcal/kg NAR Indonesian coal for shipment over April-June on a term contract at $41.50/mt FOB Kalimantan, and a Supramax cargo for April delivery was heard offered into China at $41/mt FOB Indonesia.
Some Chinese power utilities along the Yangtze River were looking for 4,700 kcal/kg NAR Indonesian coal for April delivery for Yuan 436/mt (ex-VAT), or $69/mt CFR basis, according to one Beijing-based trader who was willing to pay $56/mt FOB.
Buying interest for Indonesian cargoes at South China ports remains weak, said another Guangdong-based trader who was trying to sell spot 5,200 kcal/kg NAR Indonesian thermal coal at Guangzhou port.
"We are offering the material at only Yuan 479/mt without VAT or port service fees ex-stockpile basis at Guangzhou port, but buying interest has been weak," he said.
A Supramax cargo of 5,300 kcal/kg NAR Indonesian coal was offered in China at $71/mt FOB or $84/mt CFR for April or May delivery, but again this met with little interest from buyers.
Nearly 17 vessels were waiting for cargoes at East Kalimantan ports this week, and this may have led to higher offer prices from Indonesian miners, he added.
