Perth — Import restrictions are continuing to hold up shipments of Australian thermal coal at Chinese ports and a solution to the deadlock is not expected any time soon, market sources said on Friday.
Receive daily email alerts, subscriber notes & personalize your experience.Register Now
Chinese officials are still to advise on the likely duration of the import controls, which include customs clearance times of 40-50 days for arriving Australian coal ships, market sources said.
As a result, very few bids were seen during Friday's Asian trading session for Australian 5,500 kcal/kg NAR thermal coal, and sources described this market as well offered at $59-$60/mt FOB Newcastle in terms of June and July shipments.
Adding to the gloomy demand for Australian cargoes is the Chinese yuan's slide in value against the US dollar, which imported cargoes are priced at, and a squeeze in the arbitrage between imported and domestic thermal coal prices, market sources said.
Market speculation that some state-owned power generators in China had shown fresh interest in High Ash Australian 5,500 kcal/kg NAR cargoes for August loading have proved unfounded.
A number of smaller Chinese buyers such as cement companies and those in the steel industry have been booking cargoes of this Australian grade, but only because they appear prepared to wait through lengthy customs clearance for this origin at Chinese ports.
Eight Capesize ships carrying Newcastle coal cargoes are currently waiting to discharge at Chinese ports, according to S&P Global Platts vessel tracking software, cFlow, Friday.
These cargoes add up to 1.36 million mt of coal and worth approximately $82 million, based on the average price for FOB Newcastle 5,500 kcal/kg NAR thermal coal of $60/mt during April, when the cargoes were likely sold.
The eight waiting ships laden with Newcastle coal include two vessels at northeast China port Lianyungang's coal discharge berth, two ships stationary off Xiamen port, one at Zhoushan port's Liusheng coal berth, another at Quanzhou port, one anchored off Fangcheng port in the Gulf of Tonkin, and another in Zhangjiang port's vessel queue, the cFlow software showed.
Market sources said an estimated 1 million to 1.5 million mt of Australian thermal coal had been booked for China over March-April.
In the market for Newcastle 6,000 kcal/kg NAR thermal coal, there was a deal done at $81/mt FOB for a 25,000-mt parcel loading in August. There was also a similar deal done on Wednesday for this grade and month of delivery on globalCOAL.
-- Michael Cooper, firstname.lastname@example.org
-- Edited by Norazlina Jumaat, email@example.com