The huge stir in buying activity lately in the global market due to the growing concerns regarding tighter coking coal supplies has not affected buying activity in China. Specifically, notwithstanding the sanctions against Russia, China is not expected to suffer so much, maintaining its cooperation with Russian suppliers of coking coal. “A few banks are refusing to open LCs for Russian origin material. But a few others are not really doing so,” a representative of one steel mill stated. “I have not found anyone who has yet managed to open a LC in CNY or send CNY payments to a Russian bank, and so as of now these might all be unreal trade flows.“ We’ll see and learn in the coming days,” a major international trader commented. Meanwhile, ex-Russia low-volatile pulverised coal injection (PCI) is said to be available at $260-300/mt CFR, with most bids standing currently at $250/mt CFR compared to $280/mt CFR in a transaction late last week. “Ex-Yakutia washed coking coal is offered at $300/mt CFR and above, for the better grade. For the lower grade, the price is $30/mt less,” an international trader commented.
Despite the absence of significant changes in supply of coking coal into China so far, coke prices in Tangshan have increased by RMB 200/mt ($31.6/mt) compared to March 4, to RMB 3,260/mt ($515/mt) ex-warehouse, according to SteelOrbis’ data. The main reason behind the increase is the increasing capacity utilization rates and the relatively low inventory levels. However, the worsening Covid-19 pandemic has negatively affected the release of demand from downstream users.
As of Friday, March 11, coke futures prices at Dalian Commodity Exchange (DCE) are at RMB 3,677.5/mt ($581/mt), rising by RMB 92.5/mt ($14.6/mt) or 2.6 percent compared to March 4.
$1 = RMB 6.3306