There were increased inquiries in the Indonesian GAR 4,200 kcal/kg (NAR 3,800 kcal/kg) market from some Chinese buyers seeking cargoes ahead of the holiday, although deals were slow to emerge. There is a view in the market that prices may find further support next week, with the Islamic fasting month of Ramadan due to begin on 5 May. Many Indonesian mines reduce their operational hours during Ramadan, which in previous years has curbed supplies. In addition, China is approaching the high-demand summer season, when demand for air conditioning usually pushes electricity consumption higher.
May-loading geared Supramax GAR 4,200 kcal/kg (NAR 3,800 kcal/kg) cargoes were bid today in a $38.50-39/t fob range, up from $38-38.50/t yesterday. Offers for May-loading Supramaxes of this coal were at $39-40/t fob today, compared with $39-39.50/t yesterday. Argus last assessed this market at $38.34/t on 26 April.
Trade was subdued in the ICI 4 derivatives market, which clears on the CME, ahead of this week's Chinese public holiday. Businesses in Singapore will also be closed tomorrow for a public holiday. May and June ICI 4 derivatives contracts were both bid at $39/t and offered at $39.75/t, while July was bid at $38.15/t and offered at $40/t. August contracts were bid at $37.40/t and offered at $40.25/t, while third-quarter 2019 contracts were bid at $37.40/t and offered at $40.25/t.
On the intermonth spreads, June derivatives were bid at a 25¢/t discount to July and offered at a 75¢/t premium. July was also bid at a 25¢/t discount to August and offered at a 75¢/t premium to August. Third-quarter 2019 contracts were bid at a 75¢/t discount to the fourth quarter and offered at a $2.25/t premium. The bid-offer spread between June and July, and July and August contracts were unchanged from yesterday.
In the GAR 3,400 kcal/kg market, May-loading Supramax cargoes were bid around $22.50-22.75/t today. By comparison, last week a May-loading geared Supramax cargo of this coal changed hands at $22/t.
In the Australian thermal coal market, at least a few deals were heard done on the last day before the Chinese holiday. A May-loading Capesize cargo of NAR 5,500 kcal/kg Australian coal was heard sold for $61.50/t fob Newcastle, and a Capesize cargo loading out of Queensland in May was heard selling at slightly above $62/t fob. Offers were above $62/t fob Newcastle for May and June Capesize cargoes.
There were some reports that the Chinese government now plans to continue restricting Australian coal imports, possibly through September. But this does not appear to have dampened interest from traders still willing to take a risk to profit off the arbitrage with domestic coal.
In the Chinese market, offers of domestic NAR 5,500 kcal/kg coal were at 620-625 yuan/t ($92.10-92.80/t) fob northern China ports, with bids at Yn615-618/t.