262.50+11.00"Some buyers in China have been advised by banks and...

262.50+11.00

"Some buyers in China have been advised by banks and higher authorities to refrain from procuring Russian coal due to possible sanctions amid Russia's invasion of Ukraine, sources told S&P Global Platts Feb. 24.

Market participants globally are cautious about trading Russian coal after sanctions were imposed on Russian banks and high-level officials after Moscow escalated its conflict with Ukraine Feb. 21.

[...]

Coal prices surge in Indonesia, Australia

Chinese buyers staying away from Russian coal could boost the prices of thermal coal from Indonesia and Australia, sources said.

"With them [Chinese buyers] stepping away from Russian coal it is likely driving up sentiment around the other Pacific supplies from Indonesia and Australia, as market participants likely expect them (the Chinese buyers) to come back to the market for those supplies. With already tight spot coal supplies before this, it seems to boost expectations even further," Wendy Schallom, Senior Analyst, Coal & Power with Platts Analytics said.

The price of Indonesian 4,200 kcal/kg GAR has already risen in 2022 due to supply tightness since January, when Jakarta announced a blanket ban on overseas sale of coal as domestic inventories ran low.The price of Indonesian 4,200 kcal/kg GAR rose to $77.05/mt FOB Feb. 24 from $63.45/mt FOB Dec. 31, 2021, Platts data showed.

Traders said that Chinese buyers had refrained from procuring coal heavily during the Lunar New Year and in the run up to the Winter Olympics due to environmental concerns. Sellers expect Chinese buyers to pick up the pace of purchasing Indonesian coal moving forward.

The prices of Australian-origin coal are also expected to gain due to demand from East Asian countries such as Japan, Korea and Taiwan.

China's unofficial ban on Australian coal remains in place.

Logistical bottlenecks and wet weather conditions leading to supply tightness have already supported Australian coal prices, which rose to $157.25/mt FOB on Feb. 23 from $103.50/mt FOB Dec. 31, according to Platts data.

"There is no fair value in the markets under these circumstances, sellers can quote any price and trades will depend on the buyer's desperation," an Indonesia-based trader said."

source: https://www.spglobal.com/platts/en/market-insights/latest-news/coal/022422-chinese-buyers-hesitate-to-procure-russian-coal-amid-ukraine-conflict-sources


Interestingly, today only a single NewCastle Future was traded for March delivery at $262.50 (+$11.00).