Chinese producers of metallurgical coke have continued to find themselves caught in the crossfire between the ongoing challenges when delivering material due to lockdown restrictions and the continued rise in feedstock prices. Specifically, the imposition by the EU of its fifth package of sanctions against Russia, which, among other things, comprises a prohibition to import coal and other solid fossil fuels from Russia into the EU from August 2022, has changed sentiments in the coking coal market drastically. In particular, with the deal done at the end of previous week, ex-Australia coking coal prices started their strong growth. The suppliers of coking coal to China have followed the same pattern notwithstanding the sluggish trading to this destination for a certain time. Accordingly, following a deal for a 135,000 mt cargo for ex-US hard coking coal Buchanan at $475/mt CFR China last week, new ex-US hard coking Blue Creek coal offers, for May loading, have been voiced at $575/mt CFR China this week. New ex-Russia hard coking coal offers have been declared at $335/mt CFR China, up $15/mt over the past week, while premium hard coking coal offers are expected to be announced not below $400/mt, versus $370/mt CFR a week ago. “The suppliers may be encouraged to offset the previous gap, seeking higher prices this time,” a major international trader commented.
Given the recent developments in the industry, Chinese suppliers of coke have increased their offers likewise, for domestic and overseas customers. In particular, export quotations for blast furnace (BF) coke (CSR 64/62%) rose to $670/mt FOB versus wide-spread $650-655/mt FOB levels voiced last week. Ex-China coke (CSR 62/60%) is said to be available at $650/mt FOB. Stricter sanctions against Russia have continued to force Russian suppliers of metallurgical coke to actively seek alternative customers. A deal for ex-Russia metallurgical coke has been heard this week to China at $550/mt CFR. In the meantime, an offer for 30,000 mt of metallurgical coke to Vietnam has been heard at $580/mt CFR, though the origin of material has not been specified by the time of publication. “In the past, purchases of raw materials in the steel industry were stable. It was possible to understand the present and the future as regards the US and our competitors. But now everybody appears to have completely changed their suppliers and strategy,” a representative of a European steel mill commented with regard to the current market situation.
Meanwhile, Chinese producers of metallurgical coke have reportedly increased their offer prices to the domestic market by RMB 200/mt ($31/mt) this week. On balance, coke prices in Tangshan are now at RMB 3,660/mt ($572.8/mt) ex-warehouse. “There is no improvement in coke supply. Moreover, it has gotten more complicated with a train accident on the busiest DAQIN line for coal transportation,” a Chinese trader stated.