The uptrend seen in the international coking coal market has lately been influencing the coke price in China, thereby threatening the profit margins of Chinese steel producers.
According to data released by the China Association of Coal Transporation and Sales, on March 24, the coke price in Shanxi Province stood at RMB 1,450/mt ($213/mt), while the spot price of coking coals imported from Australia had already reached RMB 1,830/mt.
The head of U.S. Peabody Energy Co., BTU (Beijing), Pan Wanze, has stated that some Chinese enterprises have been seeking to import coking coals with his assistance. However, he added, with the Asian economy recovering, there is a lack of availability of coking coals. He also noted the strong price increase accepted by Japanese steelmakers in the supply contract they signed with Australian coal suppliers.
In 2009, Mr. Pan continued, the coal tonnage imported by China exceeded 20 percent of total coal imports in the Asia-Pacific market. The coal price in the Asia-Pacific market is highly correlated with Chinese market demand. At the same time, the rise in global coal prices can also influence the Chinese market, he concluded.