June 17, 2019 - Indonesian physical coal prices were steady today, although some buyers raised their bidding prices slightly for low-calorific value material amid further weather-related supply disruptions in parts of Kalimantan.

Bids for July-loading geared Supramax GAR 4,200 kcal/kg cargoes were in a $35.50-36/t range today, up from the $34-35.50/t range in the market for much of last week. Most offers were at around $36/t today, unchanged from late last week. Details of deals were slow to emerge, which is typical for a Monday.

Deals last week included a July-loading geared Supramax GAR 4,200 kcal/kg cargo at $36/t and an August-loading shipment at $35.50/t. Argus last assessed prices of this coal on 14 June at $35.66/t, down by 14¢/t from the previous week.

Heavy rain is causing severe disruptions to mining and logistics operations in Kalimantan, resulting in delayed shipments. As a result, a number of producers are also struggling to meet their sales commitments, while at least two producers — Jhonlin and PCN — last week declared force majeure on shipments.

The ICI 4 derivatives market also made a slow start to the week after a total of 50,000t of mostly June contracts traded last week. Bids were broadly stable today, although July offers increased compared with last week. July contracts were bid at $35.50-36/t today with different Singapore-based brokers, with an offer seen at $38/t. By comparison, July contracts were bid at $38.50/t on June 13 and offered at $36.20/t. August was bid today at $35.50/t, although there were no corresponding offers. By comparison, August ICI 4 contracts were offered late last week at $36.25/t.

In the Australian thermal coal market, a September-loading 25,000t clip of NAR 6,000 kcal/kg coal traded for $73.50/t fob Newcastle on screen today. A cargo of the same size for August loading traded at a $4 discount to the Global Coal index, also on screen. But neither of those are large enough to fit the Argus index.

Some South Korean tender demand also emerged. South Korean state-owned utility Korea Western Power (Kowepo) issued four tenders today to take as much as 4.82mn t of coal over five years. Two of the tenders seek a combined 2.71mn t — 301,000t of that for this year — of minimum NAR 5,700 kcal/kg coal with maximum 0.6pc sulphur, which may potentially be supplied by Australian sellers.

In the China domestic market, offers of NAR 5,500 kcal/kg coal were around 565-600 yuan/t ($81.60-86.60/t) fob northern China ports today, steady from late last week. Utility bids were no higher than Yn565/t.

In China's futures market, the September contract on the ZCE closed at Yn591.20/t today, up by Yn9.20/t from June 14.