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Sunday, 26 May 13
AMPLE SUPPLY, LOW DEMAND KEEP COAL PRICES UNDER PRESSURE


COALspot.com - Sub-Bit Indonesia coal swaps (FOB ) for average July 2013 delivery have lost 0.07 percent and API 8 CFR South China Coal shipment lost 0.06percent  day on day as of  Friday, 24 May 2013, according to the data released by AsiaClear OTC coal swaps on Friday.

SGX has launched API 8 CFR South China Coal Swap on 29 April 2013.

A commodity swap is a financial agreement whereby a floating, or spot; price is exchanged for a fixed rate over a specified contract period.

DSP of SGX AsiaClear OTC Coal Swaps  - Sub-Bit FOB Indonesia Coal


Sub-Bit Indonesia coal swaps (FOB ) for average July 2013 delivery have gained  0.68 percent  week on week but lost 0.07 percent on day on day as of  Friday, 24May  2013, AsiaClear OTC coal swap's report said. Sub-Bit FOB Indonesia coal swap for average July 2013 delivery was opened on 20 May 2013 at US$ 62.97 pmt and closed at US$  63.40 per MT on 24 May 2013.

July 2014 deliveries for the sub-bit Indonesia coal swap was opened at US$  65.22 pmt on 20 May 2013 and closed at US$  65.15 per MT on 24 May 2013.  Average July 2014 delivery price has flat day on day  and US$ 0.07 PMT week on week.

The sub-bit Indonesia's coal swaps for Cal 2014 delivery gained all day on day, week on week and month on a month.

AsiaClear OTC Sub-Bit Indonesia coal swap for average calendar 2014 delivery closed US$  2.45 (3.86 %) higher compared to average July 2013 delivery price of US$  63.40 on 24 May 2013.  In the meantime, the July 2014 coal swap has closed US$ 1.75 (2.76 %) higher than July 2013 swap for the same period.

The Friday’s the sub-bit Indonesia's coal swaps for July 2013, delivery gained US$ 0.88 (1.40 %) compared to for the same period last month. In the meantime, July 2014 delivery also lost US$ 0.80 (1.21 %) M-O-M.

Sub-Bit Indonesia coal swap July 2013 delivery lost day on day but gained week on week and  month on a month.  In the meantime, July 2014 flat  date on day but lost week on week and month on month. Average calendar 2014 supplies gained day on day,  week on week and month on a month.

The sub-bit Indonesia's coal swap for July 2013 has achieved highest price on 22 and 23 of May 2013. In the meantime, swap has reached its lowest level on 20 May 2013.

DSP of SGX AsiaClear OTC Coal Swaps - API 8 CFR South China Coal
SGX has launched API 8 CFR South China Coal Swap on 29 April 2013 replaced the previous swap.

API 8 CFR South China Coal shipment for average July 2013 delivery price lost US$ 0.05 per mt day on day but gained 1.50per cent  week on week as of  Friday, 24 May 2013.

The average July 2014 and cal 2014 delivery price also followed July 2013 lost slightly Day on Day.

The contract for the July 2013 and July 2014 prices gained US$ 1.23 and US$ 0.35 per MT respectively week on a week. July 2014 delivery price closed at US$  86.55 a ton on 24 May 2013. Calendar 2014 API 8 CFR South China Coal shipment prices gained US$ 0.62PMT week on week but lost day on day.

API 8 CFR South China Coal swap for average calendar 2014 delivery closed US$  3.23 (3.88 %) higher compared to average July 2013 delivery price of US$ 83.10 on 24 May 2013. In the meantime, the July 2014 coal swap has closed US$ 3.45 PMT (4.15%) higher than July 2013 swap for the same period.

API 8 CFR South China Coal swaps for July 2013 delivery have achieved a highest price on 23 May 2013. In the meantime, swap has experienced a lowest level on 20 May 2013.

Low GCV coal import ban
According to reports from medias and Platts, China's National Energy Administration is considering a proposal to ban the import of coal with calorific value on NAR basis below 4540 kcal/kg.

The media reports are further saying that, if the ban materialized,  then it would favor Australian, US, Russian and Colombian coal producers who used to produce higher GCV coal. In other hand, the Indonesian coal producers will get hit heavily as majority of Indonesian coal productions are categorized as lower calorific value coal, and the majority of low GCV coal also depends on India and China market. Indonesian domestic market is able consume only around 80 million tons of coal per annum.

According to banks and coal industry analysis, Indonesia is currently exporting at least 50 million tons of low GCV coal per annum to China. If the China’s National Energy Administration go-ahead with its plan to ban coal with calorific value below 4540 kcal/kg on NAR basis, then Indian coal consumers will enjoy a low-price coal from Indonesia. 

In the meantime, if Chinese proposed ban implemented, then it would put pressure on Indonesia's low GCV coal producers, specifically small-scale coal producers. It will also put pressure on high GCV coal consumers, as higher GCV coal prices will move stronger than now. 

"If Chinese ban executed, this legislation could be the market-changing catalyst thermal coal has been desperately seeking," Macquarie said, as quoted by medias.

Low GCV coal export  ban?
However, market doesn't know how Indonesian government will react on this ban proposal, as Indonesia also drafted a regulation during 2nd half of 2011 to ban the export of coal with calorific value below 5700 on GAD basis by 12 January 2014.  The regulation was suspended or delayed due to protest from Indonesian low calorific value coal producers.  According to mining law 4/2009 and subsequent regulations, unprocessed or the coal that not added any value will be banned by 12 January 2014 for export.

If China executes its ban, then indirectly the regulation may help the Indonesian government to implement its original plan to ban low GCV coal exports.



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