With the approaching Lunar New Year holiday, coking coal as well as coke buying interest in China has declined and only been focused on meeting urgent needs. Moreover, given the new additional requirements of the Chinese government to halt production at more steel mills in North China due to the Winter Olympics, stocks of metallurgical coke at Chinese coking plants have risen significantly over the past week, reducing support for the market.
Nevertheless, by the end of the current week coke prices in Tangshan have remained unchanged compared to January 21 at RMB 3,060/mt ($480/mt) ex-warehouse, according to SteelOrbis’ data.
In the futures market in China, this week bullish sentiments have prevailed, buoyed by a combination of fears with regard to the continuation of tight supply and hopes that China's increased monetary easing attempts will stimulate demand. Specifically, as of Friday, January 28, coking coal futures prices at Dalian Commodity Exchange (DCE) have risen by RMB 75/mt ($11.8/mt) compared to January 21, to RMB 2,281.5/mt ($358.6 mt). Meanwhile, coke futures prices have increased by RMB 192.5/mt ($30.25/mt) to RMB 3,100mt ($487.3/mt) over the same period.
In the global market, despite a bullish outlook towards the future price trend, global coking coal customers have held back from purchases this week. In particular, offers for ex-US hard coking coal Buchanan to China at $427/mt CFR have failed to attract any interest from customers. Meanwhile, the latest ex-North America hard coking coal offers have been heard at $390/mt CFR to China and at $420-430/mt CFR to India. Following sales of ex-Russia coking coal with 10.5-12.5 percent ash content at $235/mt CFR China, ex-Russia offers have increased to $240-250/mt CFR. Meanwhile, low-volatile PCI from Russia is offered at $290/mt CFR. An ex-Australia June-laycan 75,000 mt cargo of premium low-volatility hard coking coal (HCCLV) was offered at $415/mt FOB at the beginning of the current week, but also with no taker due to the long lead time. The latest trade, for a 75,000 mt cargo of premium mid-volatility hard coking coal (HCCA), for March shipment, was done at $445/mt FOB Australia. “At the moment, the market is a bit quiet but, to be honest, I expect prices to go up further next week. I do not exclude coming bookings at $455-460/mt FOB Australia,” a major international trader commented.
Ex-China export metallurgical coke offers have weakened over the past week to $520-530/mt FOB, versus offers at $540/mt FOB a week ago, as SteelOrbis reported earlier.