May 22, 2019 - A total of 35,000t of ICI 4 thermal coal derivatives traded on the Chicago Mercantile Exchange today amid clear signs that the market was softening in line with a recent decline in physical prices.

A 5,000t clip for June traded earlier today at $37.70/t, which was $1/t lower than the most recent transactions for June when a 15,000t clip and 5,000t clip traded at $38.70/t on 15 May. A 30,000t clip for July also traded today at the slightly lower price of $37.65/t. Today's trades were brokered by Singapore-based Evolution.

Bids and offers also showed signs of softening today, with May contracts bid at $38.40/t, down from $38.90/t on 15 May. May was offered today at $39/t, down from $39.50/t on 15 May. June was bid today at $37.50/t, although there were no corresponding offers, while July was bid today at $37.05/t and offered at $38.55/t. Third-quarter 2019 contacts were bid today at $36.30/t and offered at $38.75/t.

On the intermonth spreads, July was bid at a 15¢/t discount to August and offered at a 65¢/t premium, while August was also bid at a 15¢/t discount to September and offered at a 65¢/t premium. Third-quarter 2019 was bid at a 45¢/t discount to fourth-quarter 2019 and offered at a $1.95/t premium.

There were also further signs that the physical market is softening, after a public holiday yesterday in the Singapore trading hub. Some producers are still trying to hold their offer prices high amid a view that supply has been tightened by mining companies reducing their operating hours during the Islamic fasting month of Ramadan. But demand is largely being subdued by weak Chinese consumption amid a continued weakness in the yuan against the dollar.

In the GAR 4,200 kcal/kg market, most bids for June-loading geared Supramax cargoes were in a $37.50-38.25/t range, with offers around $38.50-39.50/t. By comparison, two June-loading Supramax GAR 4,200 kcal/kg cargoes changed hands last week at $38.75/t, down from around $39/t for a similar cargo during the previous week.

Fob GAR 4,200 kcal/kg prices were last assessed by Argus on 17 May at $38.77/t, down by 45¢/t compared with the previous week.

In the Australian thermal coal market, a June-loading NAR 5,500 kcal/kg Capesize cargo was heard to have traded at $58/t fob Newcastle. A June-loading 75,000t shipment was also heard to have traded at $61.50/t fob Newcastle, although market participants thought this price seemed above the market level.

The NAR 5,500 kcal/kg price was assessed most recently at $60.59/t fob Newcastle on 17 May, essentially flat from the week before.

In the Chinese domestic market, offers of NAR 5,500 kcal/kg coal were at around 618-620 yuan/t ($89.50-89.80/t) fob northern China ports today, largely steady from late last week. Bids were no higher than Yn615/t.

In China's futures market, the September contract on the ZCE closed at Yn595.40/t today, down by Yn2/t from last Friday.