Tuesday, July 15, 2014

Flurry of coking coal swaps trades as new counter parties enter

Brokerage house SSY did seven coking coal swaps trades in Asian trading hours on Monday July 14.

The August contract traded outright at $112, $113 and $113.75 per tonne, the 2015 year traded at $124 per tonne, and 2016 contracts traded at $136, $138 and $139 per tonne.

The contracts were settling against the Platts premium low-volatility fob Australia assessment and were cleared through the Chicago Mercantile Exchange.

SSY set up its coking coal desk earlier this month as it looked forward to the Singapore Exchange (SGX)'s launch of coking coal derivatives clearing in July.

The launch date, however, has been pushed back to August, market participants told Steel First.

SGX could not be reached for comment at the time of publication.

"As we expected, there is good support for the service and we are hearing from a number of newcomers to the market, as well as getting support from existing customers from other related markets," Jamie Pearce, head of SSY Futures Singapore, said.

"SSY occupies a strong position in freight and iron ore, where we account for about 30% of derivatives turnover annually. We aim to replicate this in steel and coking coal," a statement said.

Monday, July 7, 2014

Coking coal trading thin, interest picks up in Asian seaborne market

Buyers in the Asian seaborne metallurgical coal spot market made more price enquiries on Monday July 7 but trading activity remained relatively thin, sources told Steel First.

Premium hard coking coal index for material sold on a cfr Jingtang basis was calculated at $119.77 per tonne, up by $0.11 on the day. The cfr Jingtang hard coking coal index went up by $0.41 to $105.36 per tonne. 

The fob Australia premium hard coking coal index went up by $1.18 to stand at $114.06 per tonne while the hard coking coal number was up by $1.50 to $100.48 per tonne. 

"Real buying interest is still weak as Chinese domestic materials are cheap. Most customers continue to take a wait-and-see approach," a sell-side trading source said. 

While the premium segment of the market saw two recent deals concluded at $121-122 per tonne cfr China, the bid/offer gap for second-tier materials remained about $3-4 per tonne. 

On July 4, main Chinese ports were holding a total of 11.19 million tonnes of coking coal, up from 11.16 million tonnes a week earlier. Jingtang port saw its inventory rise from 4.5 million tonnes on the last Friday of June to 4.62 million tonnes on Friday last week. 

Elsewhere in Asia, Indian buyers have been relatively inactive due to the continuing monsoon season affecting the South Asian country, while Japanese customers were expected to see more movement in the next couple of months, market participants said. 

Overall steel demand in Japan in July-September was projected to hit 24.25 million tonnes while crude steel output was expected to total 27.96 million tonnes, up 1.8% and 0.1% respectively quarter-on-quarter, according to the latest estimate from the country's ministry of economy, trade and industry. 

On the Dalian Commodity Exchange, the most-traded September coking coal futures contract closed at 783 yuan ($126.68) per tonne on Monday, down from last Friday's close of 787 yuan ($127.33) per tonne. 

The most-traded September coke contract closed at 1,115 yuan ($180.40) per tonne, up slightly from Friday's close of 1,114 yuan ($180.24) per tonne. 

The yuan prices are the equivalent of cfr prices plus 17% VAT and port charges of about 35 yuan ($6) per tonne.