The recent news circulating regarding the major global coking coal suppliers has continued to trigger certain concerns among market players over potential supply shortages in the near future and has thus continued to set the trend for prices worldwide. Despite the ongoing absence of any fundamental changes in demand, global coking coal suppliers have been encouraged to increase their offers. Moreover, a certain rise in prices has already been seen in the latest transactions.
Accordingly, apart from the recent outage of Elkview steelmaking coal operations at Canada's Teck Resources for a reported two months, the recent announcement of intentions of workers at the BHP Mitsubishi Alliance (BMA) to vote on strike action over working conditions and job security has driven coking coal prices up. Australian coking coal suppliers have been testing the market with offers for premium low volatility hard coking coal, with October laycan at $300/mt FOB Australia. Nevertheless, some major traders remain highly skeptical on the sustainability of the uptrend. “Certainly, a limited impact should be seen. However, all these things could ease off very soon given the still unfavorable demand,” one market source stated. “Nothing to be bullish about. It will certainly cool down soon,” another trader stated. As SteelOrbis reported earlier, in the latest trade a 75,000 mt cargo of ex-Australia premium low-volatility coking coal (HCCLV), with October 21-30 laycan, was traded at $260/mt FOB Australia, up $5/mt from the previous transaction. Meanwhile, ex-Australia pulverized coal injection (PCI) offers have been heard at $270/mt FOB, up $20/mt compared to previous levels. Concerns over renewed flooding in Australia's Queensland amid forecasts for heavy rainfall have added support to developments. The closure of Westshore Terminals Ltd following the dock workers strike on September 17 has generated some turmoil in the market likewise. Westshore is Canada’s busiest coal export terminal, handling more than 33 million mt of coal annually.
Meanwhile, at Singapore Exchange (SGX), coking coal futures prices have continued to move up further. As of September 23, ex-Australia coking coal prices for September contracts increased by $0.33/mt compared to the previous levels, reaching $264.33/mt, while for October contract prices have settled at $268.67/mt, rising by $4.67/mt.
In the meantime, Russian suppliers of coking coal have continued to enjoy quite active trading in China. Specifically, approaching the National Day holiday (October 1-7) Chinese customers have decided to replenish their stocks, having been forced to accept higher prices in deals given the recent developments in the global coking coal market. Specifically, lately a 21,000 mt cargo of Russian Mechel's K10 coking coal, with prompt shipment was traded at $252.1/mt CFR China versus $246.35/mt CFR China in the previous tender this week and 239.22/mt CFR China late last week. “Mechel's results are really, really crazy, as it is about RMB 120-150/mt higher than the current prices in the physical market. It is not clear how representative it is,” a major international trader commented. “The current uptrend in China has been due to the approach of the long holiday, though some positive changes are expected after the October meeting,” a Chinese trader stated. Meanwhile, Kolmar's coking coal was traded at $215-220/mt CFR, which is almost equivalent to prices from stocks.
Meanwhile, coke prices in China during the week ending September 23 have remained stable.
First-grade coke prices inlocal markets in China
|
Product Name |
Specification |
Place of Origin |
Price（RMB/mt） |
Price ($/mt) |
Weekly Change（RMB/mt） |
Weekly Change（$/mt） |
|
Coke |
First grade （A<13.0,S<0.75,CSR>65.0） |
Hancheng,Shaanxi |
2,830 |
404.9 |
0.0 |
-3.4 |
|
Zibo ,Shandong |
2,970 |
424.9 |
0.0 |
-3.6 |
||
|
Pingdingshan,Henan |
2,730 |
390.6 |
0.0 |
-3.3 |
||
|
Tangshan |
2,820 |
403.4 |
0.0 |
-3.4 |
||
|
Huaibei,Anhui |
2,830 |
404.9 |
0.0 |
-3.4 |
||
|
Average |
2,836 |
405.7 |
0.0 |
-3.5 |
including 13 percent VAT
Meanwhile, as of Friday, September 23, coking coal futures prices at Dalian Commodity Exchange (DCE) have settled at RMB 2,080.5/mt ($298/mt), up 3.3 percent week on week, while coke futures prices have increased by 3.9 percent week on week to RMB 2,725/mt ($390/mt).
In Europe, the situation has continued to develop ambiguously. While the business environment in the steel industry has remained severely affected by poor demand and the major European steelmakers have continued to announce the maintenance of blast furnaces (BF), coke plants have continued to operate at usual production rates due to high demand for gas coke due to exorbitant energy prices, which leads to oversupply of coke in the region. “European mills are quite aggressive now in the coke market,” a market source noted.
$1 = RMB 6.992