Receiving pathetic buying interest from Chinese utilities, Australian thermal coal prices have been on a downward track for seven consecutive weeks, with a cumulative drop of over $18/t.
"Coal stocks at Chinese utilities are really very high, preventing them from buying spot coal in the domestic or import market," said an eastern China-based trader.
Hydropower performance will be one major factor to impact the April coal market in the world's top consumer, he said. "If coal burns remained low at utilities, the price of domestic 5,500 Kcal/kg NAR coal may slide near 535 yuan/t FOB with VAT," he added.
The trader heard one bid for Australian 5,500 Kcal/kg NAR coal at $79/t CFR South China, noting one trader failed to sell the material at $80/t CFR.
On FOB basis, Capesize cargoes of Australian 5,500 Kcal/kg NAR coal were heard offered at $72-72.5/t FOB, plus a freight rate of close to $9/t to South China, according to a Zhejiang-based trader.
"There are a few traders betting a turnaround as power demand peaks in the hot summer, but we dare not do import coal trades for the time being," he said, citing a grim outlook for domestic market in the near term.
The overall price level for Australian 5,500 Kcal/kg NAR cargoes were pulled down by several transactions recently settled at $79/t CFR South China, said a second East China-based trader.
According to him, prevailing offers for the fuel hovered around $72/t, attracting few trades.
He said some inquiries have emerged from China, yet bidding level were low at $41-42/t FOB for Indonesian 3,800 Kcal/kg NAR coal to offer of $43/t FOB.
A south China-based trader stressed that he still preferred to hold off sales at $42/t FOB for Indonesian 3,800 Kcal/kg NAR coal.
He placed shipping rate for Panamax and Supramax ships on South Kalimantan –South China sail line at $7.1-7.2/t and $8.5/t, respectively.
One Guangdong-based trader said they were still dealing with import coal that had arrived earlier and haven't made any new orders.
Foreseeing the downtrend to extend into late this month, the trader said Indonesian 3,800 Kcal/kg NAR coal on Supramax basis was offered at $42/t and 3,400 Kcal/kg NAR material on Panamax basis at $34/t, both FOB basis.
"I'm seeking one vessel of Indonesian 3,800 Kcal/kg NAR cargoes for early April delivery at 360 yuan/t CFR South China with VAT," said one Guangxi-based trader, adding it converts to $42/t FOB on Panamax basis.
The Fenwei CCI Import 5500 index was assessed at $79.8/t on April 2, CFR southern China ports, stable from a day ago and down $1.2/t from the previous week.
On the same day, the 4,700 Kcal/kg NAR import coal was assessed at $72/t, CFR southern China ports, dipping $0.2/t from the day before and $0.5/t from a week earlier; imported 3,800 Kcal/kg NAR coal was assessed at $49.8/t, steady day on day and down $0.2/t from the week prior.
(Writing by Jessie Jia Editing by Harry Huo)
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