13:12 21May12 RTRS-SOME CHINESE TRADERS DEFAULT ON THERMAL COAL SHIPMENTS ON FALLING PRICES – TRADE
13:12 21May12 RTRS-AT LEAST SIX DEFAULTED STEAM COAL CARGOES BEING RE-OFFERED IN MARKET AT SIGNIFICANT DISCOUNT – TRADE
13:40 21May12 RTRS-Chinese buyers default on coal shipments -traders
SHANGHAI/SINGAPORE, May 21 (Reuters) – Chinese traders have defaulted on some thermal coal contracts following a drop in coal and freight prices over the past month, traders said on Monday, adding that at least six cargoes were being re-offered at a discount.
Traders said thermal coal shipments from the United States, Colombia and South Africa were the biggest casualties, with at least half the cases involving contracts to buy U.S. coal.
“Many of them signed for the spot cargoes in early April and prices have fallen around $10 a tonne since then. Say if the Chinese traders were buying a cape-sized shipment, they’d be suffering a loss of nearly $1.5 million alone,” said a trader at an international firm who has been offered defaulted cargoes.
“That doesn’t even take into account the losses on freight rates. So rather than being bankrupted by these deals, they would rather dishonour the contract to survive.”
Many other Chinese coal traders were also trying to postpone their contracts, traders said.
The move illustrate the slowing appetite for commodities in China as the world’s second-biggest economy cools and comes after sources at steel mills and traders said iron ore shipments had been postponed. [ID:nL4E8GH62L]
Keywords: CHINA COAL/DEFAULTS