Coal news and updates

Newcastle prices for 6,300 kcal/kg GAR calorific value thermal coal have risen by around $1-2 to $74-75/mt FOB in recent days on short-covering by traders and some extra demand from Japanese industry, market sources said Wednesday.

 

A June-loading cargo for 50,000 mt traded at $74/mt FOB Newcastle basis 6,000 kcal/kg NAR on globalCOAL in Asia trade Wednesday, higher than the last June cargo screen trade at $72.15/mt on May 7.

 

A trade followed in Wednesday's European session for a July-loading 25,000 mt parcel at $75.25/mt FOB after 75,000 mt of Newcastle 6,000 kcal/kg NAR coal for July loading had traded on screen Tuesday at $74.75/mt and $74.90/mt, and 100,000 mt for July went through globalCOAL Monday at $74.50/mt.

 

A number of Japanese general industry customers were currently scouting for spot cargoes of this higher-grade Newcastle, Australian thermal coal.

 

"There are some tenders from Japanese general industry for 6,000 NAR Newcastle coal. Some customers want prompt Panamaxes or Handymaxes, but their interest is not too aggressive," said one trader familiar with the market in Japan.

 

Conversely, spot interest from Japanese power generators was slim, with the trader describing demand as "stable."

 

This is because Japan-based power companies like Tohoku Electric Power have already secured enough Australian thermal coal through bilateral term contracts with suppliers, he said. However, some Japanese power companies could become interested in some spot cargoes at good prices, he added.

 

The pending restart of some nuclear power plants in Japan has fallen behind schedule, and as a result thermal coal plants in the Asian country continue to operate at full capacity.

 

They could be in need of more spot thermal coal later in the year.

 

Another market participant agreed that larger Japanese coal buyers were less active, and said this section of the Newcastle market appeared to have adequate coverage through term contracts struck at $81.80/mt FOB Newcastle, basis 6,322 kcal/kg GAR.

 

"There is a bit of strength at the back end of the price curve," he said, commenting on the Newcastle derivatives market.

 

FOB Newcastle coal derivative prices for calendar year 2015 settled at $79.25/mt at Tuesday's market close while the price for 2016 was $82.90/mt, according to Platts data.

 

"It feels like Newcastle prices have stopped falling for the time being, despite what looks to be bearish sentiment out of China with no real demand and plenty of defaults and diverted cargoes," said a third Newcastle market participant.

 

"I'm not excited about the prospects of a recovery, as there is no real demand impetus here -- I suspect it's more short covering from traders than anything else," he said.

 

Thermal coal spot prices for 6,300 kcal/kg GAR cargoes have been stuck in a range of $73-75/mt FOB Newcastle since early March, and in May 2013 Newcastle prices were trading at $86-89/mt, according to Platts data.

 

 

 

Source: Platts