Market and product
Malaysia's Jun natural rubber exports dip 4% from May, fall 12% on year
Plentiful supplies of hydro-electric power in China after a period ofsustained rainfall could cap prices for Newcastle higher ash thermal coalwhich gained another 25 cents on Monday to close at $72.50/mt FOB, marketsources said.
Trading conditions in China have yet to show signs of much improvement,and the recent rally in Newcastle higher-ash prices has been driven bystronger spot demand from South Korean buyers.
"The market in China is still quite bad. Domestic coal supplies will bemore than enough to satisfy customers' needs, and there is very goodavailability of hydro power as it has been raining a lot," said a trader inChina.
Stockpiles at Chinese power plants have fallen slightly to an averageof 25 days' coal burn, compared with 27 days a couple of weeks ago, he said. "Power plants' stocks are going down slowly, but they are still morethan 20 days' supply which means utilities are not in a hurry to buy," saidthe trader in China.
"There is not much fresh demand, de-stocking is still in progress,"said a second China-based trader.
Another, potentially limiting factor for imported coal prices was the"dumping" of Indonesian thermal coal into the Chinese market at relativelylow prices, said the first Chinese trader.
He cited recent sales of lower calorific value 3,700 kcal/kg NARIndonesian thermal coal into China at $26/mt FOB Kalimantan, a significantdrop from $42/mt FOB for this grade of coal a few weeks ago.
Indonesian coal sellers were prepared to sell this grade of coal toChinese buyers at discounted prices in order to move product that was at riskof deteriorating in calorific value the longer it sat on quaysides in thecountry, he said.
The calorific value of thermal coal can decline when it is stored in theopen air for a long period of time, and the Chinese trader put the shelf-lifeof Indonesian thermal coal at roughly 45 to 60 days. "Coal is not a commodity that is suitable for long-term storage. Thatis why it is not like hydro power," he said.
BID PRICES UP
There was an uptick in bid prices for Newcastle thermal coal withmaximum 23% ash in the over-the-counter market Monday, after some tenderactivity by South Korean buyers led to bookings for 18% Australian thermalcoal.
Buyers were heard bidding for September and October-loading cargoes ofNewcastle higher ash coal at $71.50/mt FOB Newcastle through broker MarexSpectron during Monday's Asian trading window, compared with about $70/mt FOBa week ago.
Sellers were holding back from showing prices in the market to determinewhether the present rally in Newcastle higher-ash prices had legs or not, andselling interest was heard previously in the market at $72/mt FOB last week.
A trader in China said they had received offers for prompt-deliveryAustralian higher ash thermal coal at prices between $68-70/mt FOB basis, andsome also on a delivered price basis.
"Some sellers came to me showing a rough interest of around $79-80/mtCFR China," said the trader.
Meanwhile, on globalCOAL's screen traded market, Newcastle 6,000 kcal/kgNAR coal parcels were offered at $92.25/mt FOB for September loading, andOctober parcels were bid at $92.75/mt FOB to offers at $93.25/mt in Monday'sAsian trading period.
CHINA'S GOLDEN WEEK
Two market sources said they did not expect to see any significantimprovement in Chinese demand for imported thermal coal until after thecountry's Golden Week holiday in the first week of October.
"We are veering toward the September push for Q4. Before Golden Weekyou might see a rally, though it might end up costing some people a lot ofmoney," commented one Asia-Pacific market participant.
A sizeable quantity of Colombian and US thermal coal was being readiedfor shipment to China in Q4, which could further depress prices in theAsia-Pacific seaborne market, he said.
"I don't see the demand or the appetite currently for imported coal inChina," he added.
A trader in China ruled out any rebound in end-user demand until lateOctober at the earliest.
"We see the market as remaining soft in the lead up to Golden Week andfor two weeks after, before buyers eventually return to the market. Thestrength of hydro power is the main reason for this," said the China-basedtrader.
Trading conditions in China have yet to show signs of much improvement,and the recent rally in Newcastle higher-ash prices has been driven bystronger spot demand from South Korean buyers.
"The market in China is still quite bad. Domestic coal supplies will bemore than enough to satisfy customers' needs, and there is very goodavailability of hydro power as it has been raining a lot," said a trader inChina.
Stockpiles at Chinese power plants have fallen slightly to an averageof 25 days' coal burn, compared with 27 days a couple of weeks ago, he said. "Power plants' stocks are going down slowly, but they are still morethan 20 days' supply which means utilities are not in a hurry to buy," saidthe trader in China.
"There is not much fresh demand, de-stocking is still in progress,"said a second China-based trader.
Another, potentially limiting factor for imported coal prices was the"dumping" of Indonesian thermal coal into the Chinese market at relativelylow prices, said the first Chinese trader.
He cited recent sales of lower calorific value 3,700 kcal/kg NARIndonesian thermal coal into China at $26/mt FOB Kalimantan, a significantdrop from $42/mt FOB for this grade of coal a few weeks ago.
Indonesian coal sellers were prepared to sell this grade of coal toChinese buyers at discounted prices in order to move product that was at riskof deteriorating in calorific value the longer it sat on quaysides in thecountry, he said.
The calorific value of thermal coal can decline when it is stored in theopen air for a long period of time, and the Chinese trader put the shelf-lifeof Indonesian thermal coal at roughly 45 to 60 days. "Coal is not a commodity that is suitable for long-term storage. Thatis why it is not like hydro power," he said.
BID PRICES UP
There was an uptick in bid prices for Newcastle thermal coal withmaximum 23% ash in the over-the-counter market Monday, after some tenderactivity by South Korean buyers led to bookings for 18% Australian thermalcoal.
Buyers were heard bidding for September and October-loading cargoes ofNewcastle higher ash coal at $71.50/mt FOB Newcastle through broker MarexSpectron during Monday's Asian trading window, compared with about $70/mt FOBa week ago.
Sellers were holding back from showing prices in the market to determinewhether the present rally in Newcastle higher-ash prices had legs or not, andselling interest was heard previously in the market at $72/mt FOB last week.
A trader in China said they had received offers for prompt-deliveryAustralian higher ash thermal coal at prices between $68-70/mt FOB basis, andsome also on a delivered price basis.
"Some sellers came to me showing a rough interest of around $79-80/mtCFR China," said the trader.
Meanwhile, on globalCOAL's screen traded market, Newcastle 6,000 kcal/kgNAR coal parcels were offered at $92.25/mt FOB for September loading, andOctober parcels were bid at $92.75/mt FOB to offers at $93.25/mt in Monday'sAsian trading period.
CHINA'S GOLDEN WEEK
Two market sources said they did not expect to see any significantimprovement in Chinese demand for imported thermal coal until after thecountry's Golden Week holiday in the first week of October.
"We are veering toward the September push for Q4. Before Golden Weekyou might see a rally, though it might end up costing some people a lot ofmoney," commented one Asia-Pacific market participant.
A sizeable quantity of Colombian and US thermal coal was being readiedfor shipment to China in Q4, which could further depress prices in theAsia-Pacific seaborne market, he said.
"I don't see the demand or the appetite currently for imported coal inChina," he added.
A trader in China ruled out any rebound in end-user demand until lateOctober at the earliest.
"We see the market as remaining soft in the lead up to Golden Week andfor two weeks after, before buyers eventually return to the market. Thestrength of hydro power is the main reason for this," said the China-basedtrader.
