MARKET NEWS. Tuesday, Oct 24, Coal News

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1 Tuesday, Oct 24, 2017 MARKET NEWS Coal News The API2 Cal18 contract opened flat to Friday s close at $83.55 after early strength across the German Power market faded through the early part of the morning session. The German Power Baseload Cal18 contract touched 20cents higher at 36.10/MWh before weakening in a move which correlated with the price action across the API2 curve. The two products have traded bullishly across the medium term and last week were both stimulated with reports regarding an extension to French nuclear disruptions at one unit and an increase to the duration to a maintenance period at second unit. The global coal market once more failed to gather momentum in either direction following Friday s lack of volatility. Fundamental information guiding sentiment has remained absent since the quashing of strike action by union workers at Pacific National last Thursday which guided coal prices off its highs. The greatest differential from Friday s close across the API2 curve was apparent in the Q417 v Q118 spread which rose 25cents to $3.70. The API2 Cal18 v Cal19 spread was once more well supported closing 10cents higher at $7.50. The spread between the API2 and NEWC markets tightened marginally across the session with the Q417 API2 v NEWC spread closing 30cents higher at -$4.70 and the Cal18 API2 v NEWC spread closing 5cents higher at -$5.60. Backwardation across the API2 curve reduced with the Q118 v Cal18 spread closing 20cents lower at $4.85. API 2/API 4 API 4 Bid $ Offer $ Mid $ Chg Bid $ Offer $ Mid $ Chg Pg. 1

2 Iron Ore News Market Comment Pretty uneventful here this evening and believe also the case market wide which saw the DCE traded at the range of During the session, the Q1/Q2 trading between banks at 0.25 whilst simultaneously trading 0.35 elsewhere probably the highlight. Bank buying on the q2 from Asian seller, while generally the market saw the Chinese trade participants buying on the front. Paper & Physical trades (previous trading day) Miner Rio trade 170k Fe 61% PBF at 61.52/mt for Nov 6-15 laycan (last 62.19/mt, 20 Oct 2017). Rio trade 70k Fe 62% PB lump at IODEX 62% +$0.2553/dmtu CFR Qingdao 1-30 Nov Avg pricing for Nov 9-18 laycan (last at +$0.2566, 19 Oct 2017). Lianfeng International Pte Ltd buys from Cargill International Trading Pte Ltd at $60.15/dmt CFR Qingdao, 170K for Nov 2-11 laycan. Port Inventory According to Umetal's survey of 42 ports in China, the total port inventory stood at million tonnes on Tuesday, 24 Oct 2017, down 250,000 tonnes as compared to last Friday, while daily cargoes evacuation increased by 149,000 tonnes to 2.70 million tonnes. Technical Reports Base Metals and Non Ferrous Intraday Support and Resistance The DCE technical on the daily chart is starting to look a lot more solid as it has closed 1 point below technical resistance. If broken we should see market shorts looking for cover which has the potential for a more sustained rally. Needs to trade above CNY for confirmation of a breakout Pg. 2

3 Oil News Oil prices largely held on to last week's gains on Monday, supported by supply disruptions in Iraq and a drop in U.S. drilling. However, the reduction in drilling rigs in the United States could be temporary, analysts said, as activity had been restrained by hurricane threats. The number of U.S. rigs drilling for new oil fell by seven to 736 in the week to Oct. 20, the lowest level since June, energy services firm Baker Hughes said on Friday. RIG-OL-USA-BHI Global benchmark Brent crude LCOc1 was trading at $57.56 a barrel at 0957 GMT, down 19 cents. U.S. West Texas Intermediate (WTI) crude CLc1 was up 2 cents at $ "The market is in a tug of war between short-term bullish drivers which are very true, very visible and very strong versus real concerns for the oil market balance for 2018," said Bjarne Schieldrop, chief commodities analyst at SEB Markets. One bullish factor is supply disruptions in northern Iraq, where tensions have been running high since the Kurdistan region's vote in favour of independence last month. As of Sunday, oil exports from Iraq's Kurdistan via the Turkish Mediterranean port of Ceyhan were still flowing at sharply reduced rates between 200,000 and 250,000 barrels per day, two shipping sources said. (Full Story) Flows had increased slightly to 255,000 bpd by Monday, one source said. Typically, the pipeline transports around 600,000 bpd. Iraqi Oil Minister Jabar al-luaibi said on Saturday oil exports were increasing from the southern Basra region by 200,000 bpd to make up for a shortfall from the northern Kirkuk fields. In a landmark visit to Iraq, Saudi Arabia's Energy Minister Khalid al-falih praised the two countries' collaboration within the Organization of the Petroleum Exporting Countries to cut production in an effort to prop up prices. Iraq said the two countries would continue to cooperate in implementing decisions by oil-exporting countries. The remarks come just over a month ahead of the group's next scheduled meeting, at which the oil exporters are expected to announce further decisions on their production-curbing deal. "The market looks considerably different now than it did just a few months ago and signals coming from the organization itself and member countries continue to be constructive for prices," analysts at JBC Energy wrote. The crude oil volatility index.ovx, which measures market expectations for 30-day price volatility, fell to levels similar to those seen in 2014 last Friday. Pg. 3

4 Physical Summary Platts HSFO Trade Summary: 8 trades 1) Platts HSFO 180CST: FOB Straits: 20kt: Nov 8-12: Gunvor sells to Vitol at MOPS plus $1.25/mt INCO (4: ) 2) Platts HSFO 180CST: FOB Straits: 20kt: Nov 13-17: Gunvor sells to Vitol at MOPS plus $1.00/mt INCO (4: ) 3) Platts HSFO 180CST: FOB Straits: 20kt: Nov 19-23: Gunvor sells to Vitol at MOPS plus $1.00/mt INCO (4: ) 4) Platts HSFO 180CST: FOB Straits: 20kt: Nov 14-18: Gunvor sells to Trafi at MOPS plus $1.00/mt INCO (4: ) 5) Platts HSFO 380CST: FOB Straits: 20kt: Nov 19-23: Vitol sells to HL at MOPS Nov Avg. plus $1.00/mt INCO (4:27:47.666) 6) Platts HSFO 180CST: FOB Straits: 20kt: Nov 19-23: Shell sells to Vitol at MOPS plus $1.00/mt INCO (4: ) Pg. 4

5 7) Platts HSFO 180CST: FOB Straits: 20kt: Nov 8-12: Gunvor sells to Vitol at MOPS plus $1.00/mt INCO (4: ) 8) Platts HSFO 180CST: FOB Straits: 20kt: Nov 8-12: Mercuria buys from RGES at MOPS plus $0.75/mt TOTAL GTC (4:28:57.404) Platts Gasoil Trade Summary: ONE trade reported 1) Gasoil 500ppm: FOB Straits: Nov 18-22: 250kb: BP buys from SK Energy at MOPS plus 18 cents/b (Deemed pricing Nov 16-22) (4:29:55) Pg. 5

6 Platts Jet Trade Summary: ONE trade reported 1) Jet: FOB Straits: Nov 8-12: 200kb: Chevron sells to BP at MOPS plus 20 cents/b (Deemed pricing Nov 7-13) (4:27:34) PLATTS ASIA MOGAS CARGO MOC: DEAL SUMMARY: FIVE TRADES RON: FOB Straits: Nov 8-12: Trafi buys from Petrochina at $67/b for 50kb (4:28:13) RON: FOB Straits: Nov 19-23: Trafi sells to Hin Leong at $66.60/b for 50kb (4:29:46) RON: FOB Straits: Nov 8-12: Petrochina sells to Unipec at $67.05/b for 50kb (4:29:50) RON: FOB Straits: Nov 13-17: Unipec sells to Hin Leong at $66.90/b for 50kb (4:29:55) RON: FOB Straits: Nov 19-23: Gunvor buys from Lukoil at $66.65/b for 50kb (4:30:22) Naphtha deals summary: One Trade 1) Naphtha: CFR Japan: 25kt: H2 Dec: BP sells to Glencore (4:30:03) MGO Date LA/Long Beach New York Rotterdam Houston Rio De Janeiro Fujairah Hongkong Singapore Pg. 6

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