Chinese Buyers Needing Coal Promptly Would Have to Pay Higher Prices Currently

Chinese buyers needing coal promptly would have to pay higher prices currently due to supply constraints created by weather-related disruptions in both Indonesia and Australia, sources said Thursday. 

"People who have been caught short are buying at higher prices as offer prices have gone up," a Singapore-based trader said. "No seller in Indonesia would be willing to sell 5,000 kcal/kg GAR below $60/mt FOB on a gearless vessel basis currently." 

He also said some deals for Newcastle 5,500 kcal/kg NAR coal had been reportedly concluded at very high prices of $80/mt FOB, but did not provide further details. Platts could not immediately confirm these deals. 

"We will see a few deals getting concluded at $80/mt FOB in the short term too," he added, referring to the Newcastle 5,500 kcal/kg NAR coal and the weather-related disruptions in Australia. 

Despite the rise in offer prices of 5,500 kcal/kg NAR Australian thermal coal, Chinese buyers have held firmly to their bidding prices of about $83/mt CFR for March-April deliveries. 

"I have got some offers of 5,500 kcal/kg NAR Newcastle cargoes at $75-76/mt FOB [prompt loading] but will not consider booking any such material at the moment," a Guangdong-based trader said, adding that his buying interest was no higher than $73/mt FOB or $83-84/mt CFR. 

The Guangdong-based trader has secured 4-5 million mt of 5,500 kcal/kg NAR Australian thermal coal and 4,700 kcal/kg NAR Indonesian thermal coal on term contracts for 2013 but has yet to settle the prices. 

A mini-Capesize cargo of 5,500 kcal/kg NAR Newcastle coal was being offered at $73.50/mt FOB for March delivery but again has met with little interest due to its high volatile matter content of up to 40%. 

"The offer price is not bad, but the high VM content has decreased its competitiveness against similar Indonesian coal," another Guangdong-based trader said. 

Instead, the second Guangdong-based trader is looking to buy some 4,700 kcal/kg NAR Indonesian coal at a landed price no higher than $65/mt CFR for February or March delivery. 

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 day period at $76/mt, up 30 cents on-day. 

Platts also assessed the FOB price of Indonesian 5,900 kcal/kg GAR thermal coal for delivery in the next 90-day period at $74/mt, up 25 cents on-day and for 5,000 kcal/kg GAR for the same delivery period at $58/mt, up 40 cents from Wednesday. 

The FOB price of Indonesian 4,200 kcal/kg GAR thermal coal for loading in the next 7-45 day period was assessed at $39.70/mt, up 20 cents on-day.