Although coke trading in China has been recovering gradually to the pre-holiday levels, buying activity remains constrained by the ongoing restrictions on steelmaking operations. Moreover, after Chinese steel mills recently declared their intention to cut met coke prices by RMB 200/mt ($31.5/mt) once again, some producers in Tangshan have already implemented a reduction. Given that, combined with the two reductions in coke prices previously, Chinese coke producers have continued to suffer losses and have been searching for customers in export destinations. As SteelOrbis has reported earlier, a cargo of ex-China met coke (CSR 65%) was booked by a major Indian steelmaker through an international trader at $550/mt CFR. Overall, export prices for ex-China met coke stand at $500-510/mt FOB. “Though there is a 5.5 percent import duty for Chinese met coke in India, Chinese material is the cheapest now,” a China-based source stated.
In these circumstances, Chinese customers have continued to put pressure on import coking coal prices. “India might be skyrocketing but China is not yet following. After the government said they do not support speculative price surges, the market became more serious. I think we will see a better market in China only in about two to three weeks from now,” an international trader commented. In particular, following a booking for ex-Russia PCI with Hardgrove Grindability Index (HGI) 80 at $280/mt CFR China, offer prices are reported to have collapsed to $250/mt CFR China. Prices for ex-US hard coking coal Buchanan have hovered at around $430/mt CFR, but with no buying interest. “I wonder if $350-360/mt CFR level is now a workable number,” an international trader stated.
In the futures market, the week started with a highly positive outlook towards future developments, though by Tuesday, February 15, prices have rebounded slightly. In particular, coke futures prices at Dalian Commodity Exchange (DCE) are at RMB 3,139/mt ($494/mt), RMB 12/mt ($1.9/mt) lower compared to February 14. Meanwhile, coal prices at DCE have declined by RMB 12/mt ($1.9/mt) today, February 15, to RMB 2,413.5/mt ($380/mt).