Import coking coal prices in China have posted further increase over the past week and demand has improved amid the shortage of supply in the local market. Also, from June 8, the sixth round of local coke price increases has been announced. This will keep Chinese steel producers’ margin squeezed even though iron ore prices have been heading south.
A deal for 75,000 nt of Australian mid-volatile premium hard coking coal German Creek blend has been heard at $245/mt CFR to China, which is up by $10-15/mt from the level seen earlier last week and up $20-25/mt since late May. The deal is for prompt shipment, while the tradable level for July would be up to $250/mt CFR China even from the buyers’ point of view. The gap between ex-Australia FOB and CFR China prices has narrowed a lot, meaning China’s importance for ex-Australia coking coal pricing increased.
In general, demand from China is the highest for hard coking coal. In particular, a bid for 75,000 mt of Daunia material has been booked at $225/mt FOB Australia, up $20/mt from a contract for the same grade in the middle of last week. In addition, Australian hard coking coal of the lower Curragh quality was traded to China at $215/mt FOB for July shipment.
Local prices for coking coal increased by RMB 155/mt ($23/mt) last week, more than the recent rise in coke prices. In particular, last week, a fifth round of coke price hikes was implemented and just on Monday, June 8, the sixth round has been announced and accepted by major mills, meaning that local coke prices have surged by RMB 110/mt ($16/mt).
