Indonesian coal prices little changed, activity rises

Market: Coal
20/12/18

Indonesian thermal coal prices held relatively steady, although activity increased following the awarding of two Chinese utility tenders. Sellers are increasingly keen to sell cargoes before the Christmas and new year holidays.

Bids and offers for geared supramax vessels have remained relatively steady this week, with a January-loading cargo offered at $30.50/t that received bids at $30/t. Deals involving this type of coal were done in a $29.80-31/t range last week, with the price at which transactions were concluded rising as the week progressed.

In the ICI 4 derivatives market, which clears on the CME, trade was quiet with no transactions. A first-quarter 2019 contract was offered at $33.50/t, although bids were scarce. The likely trading level for December 5,000t clips was marked by Singapore-based brokers yesterday at $30.50/t, with January in the region of $31.35 and $31.50/t and February at virtually flat to January. A total of 45,000t of ICI 4 derivatives have cleared on the CME so far this month, taking the total volume to have been cleared on the CME since the contract launched in February to around 1.75mn t.

Prices rlsewhere in the Indonesian physical market were holding relatively steady. Two January-loading NAR 4,800 kcal/kg Panamax shipments were awarded in the Yudean tender at $46.80/t, while two Panamax shipments of slightly higher quality NAR 5,200 kcal/kg product were awarded in the Huaneng tender at $55/t and $56/t respectively. Argus last assessed similar quality GAR 5,000 kcal/kg prices at $46.67/t on 14 December, down by 14¢/t compared with the previous week.

The Chinese market saw a late January loading domestic Panamax cargo of NAR 5,500 kcal/kg coal traded at 610 yuan/t ($88.57/t) on a cfr South China basis. The deal involved a domestic cargo and will discharge at Zhejiang port.

China's futures market saw the January contract on the Zhengzhou commodity exchange close at Yn592.80/t today, down by Yn2.40/t compared with yesterday. The May contract closed at Yn560.40/t, down by Yn2.60/t.

Coal consumption in the east and south of China eased off this week following a cold snap in early and mid-December. This further weighed on coal demand amid high stocks, although inventories at Qinhuangdao port in north China's Hebei province fell to 6.19mn t yesterday, a 4pc fall from 6.43mn t a week earlier, according to coal industry association the CCTD.

Stocks at Qinhuangdao had been on a mostly steady rising trend since the start of November, with just one other weekly dip at the end of that month. But the most recent week's data could signal a change to this trend, suggesting domestic utilities are starting to work down their stocks and will need to buy more coal to replenish them.

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Osaka, 23 December (Argus) — Japanese utility Chugoku Electric Power restarted the 820MW Shimane No.2 nuclear reactor for test operations on 23 December, two days earlier than originally planned. The No.2 reactor at Shimane in west Japan's Shimane prefecture was reconnected to the country's power grids for the first time in nearly 13 years, after the reactor shut down in January 2012 for stricter safety inspections following the 2011 Fukushima nuclear meltdown disaster. Chugoku reactivated the Shimane No.2 reactor on 7 December, aiming to resume power generation on 25 December. But the target date for commercial operations remained unchanged on 10 January, despite the earlier than expected restart. The Shimane No.2 reactor will be a vital power source as the sole nuclear fleet in the Chugoku area, to help enhance the resilience of the power supply structure, stabilise retail electricity prices and reduce CO2 emissions, said Japan Atomic Industrial Forum's president Hideki Masui on 23 December. The Shimane No.2 reactor is the second boiling water reactor (BWR) to be restarted after the Fukushima disaster, following the 825MW Onagawa No.2 BWR unit that resumed test generation on 15 November, with normal operations scheduled to restart on 26 December. The BWR is the same type as that involved in the meltdown at the Fukushima Daiichi plant. The restart of the two BWRs would pave the way for Japan's nuclear restoration, as 15 BWRs — including advanced BWRs — are still closed in the wake of the Fukushima disaster. Japan has restored 14 reactors as of 23 December, including the Shimane and Onagaw reactors, of which 12 are installed with a pressurised water reactor (PWR) design. Nuclear power's share The Japanese government last week set a target of 20pc for nuclear power's share in the country's draft power mix for the April 2040-March 2041 fiscal year, under the triennial review for the country's Strategic Energy Plan (SEP). Tokyo is seeking to restart all existing reactors to achieve the 20pc goal, adding that replacement reactors would also be possible. The draft SEP allows nuclear power operators that had decommissioned reactors to build next-generation reactors at their nuclear sites, not limited to the same site. The previous SEP did not mention building new reactors or replacements. Japan's Federation of Electric Power Companies (FEPC) has applauded this progress, but FEPC chairman Kingo Hayashi noted that it was disappointing the SEP did not mention a nuclear capacity target which the FEPC had requested. It also did not include building new reactors or the expansion of existing nuclear plants, Hayashi added. By Motoko Hasegawa Send comments and request more information at feedback@argusmedia.com Copyright © 2024. Argus Media group . All rights reserved.

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20/12/24

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