Remaining a hostage to its unfavorable position in the world due to the unprecedented economic sanctions against Russia, Russian coking coal producers have no other option rather than to be highly flexible to those customers who are ready to deal with them. As expected, a Russia-based company Mechel has accepted a lower price in its latest tender for K10 coking coal. Accordingly, a cargo has changed hands at $191/mt CFR China. It is noteworthy that the price in the tender in question has turned even lower than it was expected by major market insiders. “I had expected/hoped for around $200/mt CFR. The transaction price is completely discouraging,” a major international trader commented. As SteelOrbis reported, the previous tender for K10 coking coal was closed at $211/mt CFR at the middle of July. “That is a good number against $195/mt FOB Australia for premium hard coking coal which was fixed recently in the JSW's tender, though we do not buy K10 coking coal,” a representative of an India-based coke mill stated.
Meanwhile, in the futures market the sentiments changed into positive following the reports that China has been planning to set up an estate fund in order to support more than a dozen property developers. Specifically, as of Tuesday, July 26, coking coal prices at Dalian Commodity Exchange (DCE) have been settled at RMB 1,977.5/mt ($293/mt), up by RMB 53/mt ($8/mt) from Friday, while coke futures prices are at RMB 2,657.5/mt ($393/mt), increasing by RMB 29.5mt ($4/mt).
Despite some positive hopes towards the future prospects, another round of decline in the local coke prices in China is actively discussed. Due to the lingering adverse business environment, Chinese coke enterprises have been forced to cut their production up to 50 percent so far.
$1 = RMB 6.7595