SGX M42F Thermal Coal - Daily Update 20 May 2019

May month-to date:

Futures volume 15kt, open interest 80kt

 

Total volume since April 2018: 729kt

 

Physical 

Indonesian coal prices softened last week as demand from China began to slow. The depreciating renminbi is understood to underpin the uncertainty from the Chinese buy side. Numerous Indonesian-based traders and miners described market activity as quiet. While key producers say they have close to fully committed tonnage to the end of June, interest in July cargoes is understood to be scarce. Indian demand, on the other hand, remains stable. However, several industry sources pointed out that with China retreating from the market, buyers from India will be anticipating further easing in prices before they commit to deals. Low c.v. coal transacted at $38.50/t FOB, basis 3,800 kc NAR, for a geared vessel loading in May, down from levels seen last week at $39.00-39.50/t FOB, same basis. By the end of the week June loading geared cargoes were heard trading at around $38.75/t FOB, basis 4,200 kc GAR. Another trade was heard settled at $38.00/t FOB, basis 4,100 kc GAR, for a June loading geared vessel. On a China-delivered basis, transactions settled at $46.00/t CFR, basis 3,800 kc NAR, for a May arrival Panamax into Guangdong, lower than deals heard last week at $46.80-47.30/t CFR, same basis.

 

Paper

M42, as listed on SGX, traded at $38.00/t and $38.20/t for June last week, with value weakening along the curve. Last week, fair value for June was $39.30/t. The midpoint for the Q3 contract was $38.28/t, dropping from $39.05/t a week back. (ends)