Chinese traders have recently reduced purchase of overseas thermal coal for fear of possible price retreat along with warming weather after the Spring Festival and increased arrivals of import cargoes.
A Zhejiang-based trader said he had stopped taking import coal, given the current high prices that could face great risk of decline.
He placed offer price of Panamax Indonesian 3,800 Kcal/kg NAR coal at $52/t FOB and settlement price of Supramax shipment of the material at $49.5-50/t FOB.
Australian 5,500 Kcal/kg NAR coal was offered at $91/t FOB or $99-100 CFR South China, said the trader, adding nobody made inquiries for the pricy fuel.
"There weren't many deals concluded this week, and we also slowed purchase of overseas coal as the Chinese New Year draws nearer," said a Guangdong-based trader. "We may start taking March-delivery cargoes next week."
He voiced worries over possible downside of import coal after the festival, as current high consumption of coal is likely to peter out along with rising temperature.
"Few deals were clinched on Indonesian coal this week as prices have jumped too high for utilities to accept," said a Fujian-based trader. "They generally bid Supramax 3,800 Kcal/kg NAR coal at $48.5-49.5/t FOB compared with offer price of over $50/t FOB."
He noted Indonesian 3,800 Kcal/kg NAR coal was offered at $51.5/t on Panamax basis, while 3,400 Kcal/kg NAR coal above $40/t FOB on Supramax basis.
"Foreign miners were bullish toward the short-term market, yet they agree current prices have almost reached the peak," he pointed out.
A second Zhejiang-based trader said Chinese power plants were bidding low for Indonesian 3,800 Kcal/kg NAR coal at less than $50/t FOB; 3,400 Kcal/kg NAR coal was offered at $40/t FOB; Australian 5,500 Kcal/kg NAR coal at over $100/t CFR.
A Beijing-based trader said offer prices of import thermal coal stayed high though not so many cargoes are available for February delivery, with Supramax shipment of Indonesian 3,800 Kcal/kg NAR coal and 4,700 Kcal/kg NAR coal offered above $50/t and at $73/t FOB.
He noted there would be lots of import material coming into China in February, another mover for a possible decline in import coal prices.
The Fenwei CCI Import 5500 index was assessed at $98/t on February 1, CFR southern China ports, rising $0.4/t from a day ago and up $3.5/t from a week ago.
On the same day, the 4,700 Kcal/kg NAR import coal was assessed at $80/t, CFR southern China ports, unchanged from the day before and up $2/t from the week prior; imported 3,800 Kcal/kg NAR coal was assessed at $57.7/t, unchanged day on day and $1.5/t week on week.
(Writing by Tammy Yang Editing by Harry Huo)
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