Despite the uncertainty prevailing in the spot market and a certain lull in buying activity in China recently, global coking coal suppliers appear to be staying firm in their offerings. The latest escalation of the conflict between Russia and Ukraine and the consequent imposition of sanctions against Russia has made coking coal market insiders even more bullish with regard to future developments. “Chinese traders are cautious on any Russian deals as financing might not be able to secure approvals,” a Singapore-based trader stated. “I have not noticed any real impact from that so far. However, traders have started bidding higher probably because of this,” another trader commented. Accordingly, Western countries have announced a raft of new sanctions against Russia, blocking major Russian financial institutions and their subsidiaries. Furthermore, the sanctions have affected SIBUGLEMET Group, a coal mining company located in Russia. “All suppliers worldwide have become more bullish in the past few days,” an international trader commented.
Meanwhile, on February 23, a 75,000 mt of ex-Australia premium mid-volatility hard coking coal (HCCA) with June laycan has changed hands at $400/mt FOB. The long-term laycan has failed to prevent the buyer from accepting the price. Meanwhile, bids for premium coking coal with a March laycan have risen to $447/mt FOB, versus $440-441/mt FOB in the latest transaction.
Meanwhile, trading in China has remained subdued with local prices remaining more attractive in comparison to import offers. “We were seeing some US cargoes being diverted to India from China,” a major India-based steelmaker said. “I am not sure how much it will impact on the index. None of that can replace prime coals, but at least immediate demand will be met,” he added.
Nevertheless, sentiments in the futures market in China have become strongly bullish. As of Wednesday, February 23, coal prices at Dalian Commodity Exchange (DCE) have increased by RMB 124/mt ($19.6/mt) to RMB 2,682/mt ($425/mt). Meanwhile, coke futures prices are at RMB 3,445/mt ($545.5/mt), increasing by RMB 129.5/mt ($20.5/mt) to February 18.
$1 = RMB 6.31540