The Asian seaborne cargo market for 5,500 kcal/kg NAR imported thermal coal was weaker Monday, with bids slipping to about $70/mt CFR South China amid talk Chinese coal producer Shenhua was on the verge of cutting prices.
Buying interest in August and September-arrival Australian 5,500 kcal/kg NAR cargoes was said to be not firm" by one market participant in Singapore, and heard at $70-70.25/mt CFR South China for August, to offers at $72/mt.
"I have seen some people eager to buy at more than $71/mt CFR basis who are speculating that prices have reached a bottom," a trader in Singapore said, adding that speculative interest was balanced by sentiment surrounding Shenhua's next move on domestic coal prices, which was expected to be lower.
Purchase prices from utilities in south China are around Yuan 510-515/mt CFR, including 17% VAT, or $71/mt-$71.50/mt CFR, ex-VAT for 5,500 kcal/kg NAR imported material, a Shanxi-based trader said, and included traders' profit margin.
High-ash cargoes from Australia for loading at Newcastle port in August and September were heard bid at $60/mt FOB basis 5,500 kcal/kg NAR to selling interest at $61.50-62/mt, market sources said.
A Shanxi-based trader was not planning to take any new cargoes before September after booking a high-ash Australian cargo at $65/mt FOB for mid-May to June delivery. "We lost a lot on this cargo. We cannot afford to let this happen again," he said.
For higher calorific value 6,000 kcal/kg NAR screen-traded cargoes, an August-loading cargo for 65,000 mt was bid at $72/mt to an offer for 25,000 mt at $73/mt through globalCOAL.
There was talk about the ability of Australian coal to price into China given Capesize freight at $11/mt which equated to a delivered South China price of about $72.50-73/mt CFR.
QINHUANGDAO 5,500 NAR COAL
Chinese domestic 5,000 kcal/kg NAR thermal coal was heard to trade at Yuan 445/mt and Yuan 450/mt FOB Qinhuangdao.
A Jiangsu-based trader said he recently bought a 30,000 mt cargo of 5,000 kcal/kg NAR domestic thermal coal at Yuan 440/mt FOB, including 17% VAT for immediate delivery.
"The market for mid-cv coal is relatively better than for high-cv domestic coal. But it also faces generally weak demand from utilities," said the trader, who expected mid-cv coal prices to move lower soon.
The Platts/Fenwei China Coal Index (CCI 1) price for domestic thermal coal traded at Qinhuangdao port was assessed at Yuan 517/mt inclusive of VAT, down Yuan 0.50/mt from Friday.
The inaugural Platts/Fenwei CCI 2 assessment for 5,000 kcal/kg NAR domestic thermal coal traded at Qinhuangdao port came out at Yuan 447.50/mt FOB including VAT, and the first assessment for 4,700 kcal/kg NAR imported thermal coal delivered to South China (CCI 7) was $61/mt FOB.
The CFR South China (CCI 8) price was assessed at 20 cents/mt lower at $70.80/mt basis 5,500 kcal/kg NAR, excluding Chinese VAT.
Platts assessed the FOB price of Newcastle 5,500 kcal/kg NAR thermal coal with typical ash of 20% at $62.50/mt, down 20 cents.
