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  • hopewillhelpyou hopewillhelpyou Mar 23, 2014 8:16 AM Flag

    ASIA THERMAL COAL: Sellers' prices remain unmet in CFR China cargo market.(prices pushed UP)..MARCH 22,2014

    Chinese buyers refrained from meeting the delivered-price expectations of seaborne cargo sellers in unsettled Asian trade Friday, as weak fundamentals in the domestic market prolonged a week-old standoff between buyers and sellers, said market sources.
    Coastal power plants in China are unwilling to go above $75/mt CFR South China for imported 5,500 kcal/kg NAR thermal coal with a delivery date in the next 15 to 60 days, said traders.
    "At present, the bids from Chinese downstream utilities for South African 5,500 kcal/kg NAR coal were at $72-73/mt CFR South China," said a trader in China's Tianjin province.
    A better option being investigated by the Chinese trader was the potential resale of South African 5,500 kcal/kg NAR cargoes to higher-paying customers in South Korea for a delivered price of $76/mt, he said.
    A China-based cement producer was scouting specifically for one cargo of Richards Bay high-ash thermal coal with sulfur of no more than 0.8% at $76/mt CFR South China for shipment in April.
    A source at a major international coal producer noted that demand for South African 5,500 kcal/kg NAR thermal coal had edged up currently amid supply tightness, pushing up prices for April- and May-loading cargoes.
    "There are several bids [for prompt-loading cargoes] but no offers from Australia and South Africa," a Singapore-based broker said.
    As Japanese power utility and Australian coal producer Glencore Xstrata prepared to take a weekend break from their price negotiations for JFY 2015 supply contracts, FOB Newcastle 6,000 kcal/kg NAR prices onscreen were a little lower than earlier in the week.
    A 25,000 mt parcel for loading in June was bid at $72.50/mt to an offer at $74.80/mt FOB Newcastle on globalCOAL in Asia trade.
    "We dare not to book any May- and June-arrival cargoes. There is too much uncertainty," said a trader in China's Shandong province, who set a price limit of $75/mt CFR South China for April-arrival cargoes.


    Sentiment: Strong Buy

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    • Offer prices for seaborne-traded cargoes were steady on-day at $75.50-76/mt CFR in the South China market.
      May-arrival cargoes of Australian origin 5,500 kcal/kg NAR cargoes were bid at $74.25/mt CFR to offers around $76/mt as heard through broker Marex Spectron, Friday.
      A Shandong-based trader was heard to have booked several Capesize cargoes of Australian 5,500 kcal/kg NAR coal at $61/t FOB Newcastle, though this trade was unconfirmed by parties involved.
      Some Capesize cargoes of 5,500 kcal/kg NAR Australian high-ash coal were heard being offered at $63.50/mt FOB for April and May delivery, according to another Shandong-based trader
      Freight rates between Newcastle, Australia and South China averaged $15/mt for Capesize ships Friday, indicating a landed price of about $78.50/mt CFR based on FOB offer prices, the trader noted.
      The trader was only willing to pay $74/mt CFR for April-delivery cargo.
      China's depreciating currency has only helped demand for domestic material, said market sources.
      "Chinese 5,500 kcal/kg NAR domestic price is sliding towards Yuan 500/mt FOB Qinhuangdao," said a Hong Kong-based trader, referring to the lower bid prices.
      Some Chinese traders were expecting intermittent maintenance to the Datong-Qinhuangdao railway due to start on April 6 to support domestic coal prices.
      "Inbound trains to Qinhuangdao port will be reduced during the maintenance. Supply will be tightened at that time," said a Tianjin-based trader.
      The trader believed that prices for 5,500 kcal/kg NAR domestic thermal coal would return to Yuan 530/mt by early April, up from the current level of Yuan 515/mt FOB Bohai ports, including 17% VAT.
      "I would expect the domestic thermal coal market to stabilize in April when the Datong-Qinhuangdao railroad maintenance falls," a Guangdong-based trader said.
      "Until then we may not make any purchases of overseas thermal coal."

      The latest price cut by Shenhua Group, CONTINUED..................

      • 1 Reply to hopewillhelpyou
      • The latest price cut by Shenhua Group, effective from March 1 onwards, has helped the Chinese coal producer to reduce coal stocks at its dedicated Huanghua port to about 1 million mt, down about 50% month on month, market sources noted.

        Transactions were heard Friday for 5,500 kcal/kg NAR thermal coal at Qinhuangdao port at Yuan 515/mt FOB.

        At the close of Asia trade Friday, the Platts/Fenwei China Coal Index (CCI 1) for domestic thermal coal traded at Qinhuangdao port was assessed at Yuan 515/mt inclusive of VAT, unchanged from Thursday's price.

        The CFR South China (CCI 8) price was assessed at $75/mt basis 5,500 kcal/kg NAR, excluding
        Chinese VAT, and was steady on-day.

        So prices are rising, finally, here some explanations of the abbreviated terms in this article so you can fully understand and appreciate the terms.
        CFR- Cost of Freight
        NFR- Fugitive Emissions released
        NAR- Net as received
        FOB- Freight on board(delivery not included)
        VAT- Value Added Tax


        Sentiment: Strong Buy

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