OREANDA-NEWS. July 25, 2014. Imported 4,700 kcal/kg NAR thermal coal delivered to south China (CCI 7) came under pressure again on a fresh price cut by Chinese coal producer Shenhua, down 20 cents to USD56.50/mt in an oversupplied market and with weak buying interest, sources said.

CCI 2 -- the price for domestic 5,000 kcal/kg NAR Chinese thermal coal on a FOB Qinhuangdao basis -- fell Yuan 0.5 to Yuan 418/mt (USD 67.38/mt).

An Indonesia-based trader said it was offering gearless Panamax cargoes of 4,700 kcal/kg NAR -- or 5,000 kcal/kg GAR -- coal at USD 54/mt FOB, while his Chinese customers' bids were at \\$50/mt FOB.

A Fujian-based trader said: "In general, Indonesian coal didn't catch up with the domestic price and thus lost the Chinese market to some degree."

A trader in Shandong agreed, adding, branded Indonesian 4,700 kcal/kg NAR coal for Q3 delivery was offered at USD 53/mt FOB, USD 1-2/mt higher than offers from smaller mines. Buying interest for this grade was around USD 50-51/mt FOB, he said.

Major Chinese coal producer Shenhua has cut its domestic price for 5,000 kcal/kg NAR four times since end-June bringing the current price to Yuan 425/mt. Speculation that it would trim prices again this week by Yuan 5/mt was confirmed, causing buyers to remain sidelined.

Another trader source in Guangdong said Panamax cargoes of Indonesian 4,700 kcal/kg NAR coal for August delivery were offered at USD 53-54/mt FOB but Chinese bidding interest was only about USD 51-52/mt FOB.

"Our local end users' purchase prices are only about USD 52-53/mt FOB, so we will have to talk the imported price down to about USD 51/mt FOB," he said.

A source from a major Indonesian coal producer said prices have come under pressure because there was too much supply available in the market, while demand remained muted.