Interest built further along the curve in the ICI 4 derivatives market today, with a total of 18,000t of fourth-quarter 2019 contracts changing hands.
Of today's fourth-quarter trades, 6,000 t/month traded for each of October, November and December, all at $35.30/t, brokered by Singapore-based Evolution. Fourth-quarter 2019 ICI 4 derivatives last traded on 9 May, when 5,000 t/month for October, November and December traded at $38.20/t each.
In addition to today's fourth-quarter trades, two 5,000 August contracts changed hands at $35.85/t each, also brokered by Evolution.
July ICI 4 derivatives were bid today at $35.50-35.65/t and offered at $35.95-36.15/t, with different Singapore-based brokers. August contracts were bid at $35.40-35.75/t and offered at $35.40-36/t, while September was bid at $34.65/t and offered at $36.05/t. On the intermonth spreads, August was bid today at a 10¢/t discount to September and offered at a 65¢/t premium.
Trade in the physical market was relatively muted, but Indonesian GAR 4,200 kcal/kg supramax cargoes for second-half July was seen a little firmer than August loading cargoes. Trade has not taken off in earnest yet for August, but prices discussed so far are slightly softer at this point because many have filled their requirements with July cargoes.
Two second-half July loading GAR 4,200 kcal/kg geared Supramax cargoes were heard to have traded at $36/t, fuelling perceptions earlier today that this market may have bottomed and stabilised. There were reports later today that a few bids ticked up to $36.50/t and even in one case closer to $37/t for late July, suggested that at least the July loading market might have potential to recover slightly this week.
But July-loading cargoes now fall outside the current 60-day August and September-loading period for inclusion in the Argus index, after the assessment window rolled at the start of this month.
In the Australian thermal market, an October-loading 25,000t vessel of NAR 6,000 kcal/kg coal changed hands at $72/t fob Newcastle on screen today. That is not relevant to the Argus index, which captures minimum cargoes of 50,000t that are loading in August-September.
The NAR 6,000 kcal/kg index was assessed most recently by Argus at $69.54/t fob Newcastle on 28 June, down by 26¢/t on the week. Last week's assessment considered cargoes loading in July-August.
Two of the three Newcastle export terminals increased their shipments to China in June, recently released data show. The two Port Waratah Coal Services' (PWCS) terminals at Newcastle shipped 2.46mn t of coal to China in June compared with 1.97mn t in May, 1.7mn t in April and 1.02mn t in March. That suggests that low prices are encouraging traders to sell coal into China despite slow clearance times at many ports since February of this year.
Much of the Australian material supplied to China is NAR 5,500 kcal/kg and below material, with fob Newcastle NAR 5,500 kcal/kg assessed at $51.04/t last week, its lowest level since July 2016.
In China's futures market, the September contract on the ZCE closed at 599.80 yuan/t, up by Yn0.8/t from yesterday.
