During the first week of the New Year, the pessimistic mood regarding steel demand prospects in China has been replaced by optimistic sentiments, resulting in a certain consolidation of prices for raw materials, in particular coking coal and coke. Specifically, on January 2, the price for hard coking coal in the most-traded contract on China’s Dalian Commodity Exchange (DCE) surged by 2.2 percent compared to January 1, to its strongest level since the end of October, to RMB 2,277.5/mt ($357/mt). Meanwhile, coke futures prices rose to RMB 3,159.5/mt ($495.4/mt), up RMB 225.5/mt ($35.4/mt) or 7.7 percent within the same period of time. “With steel mills having restarted their operations in January, prices for raw materials have rallied,” the representative of one Chinese steel mill commented.
Active discussions about tight supply of coking coal in the global market, in particular from Australia, have encouraged Chinese steelmakers to look more closely at imports, though they are already at higher prices. Accordingly, an ex-Russia cargo of 100,000 mt of hard coking coal was booked at $245/mt CFR, up $5/mt week on week, SteelOrbis has learned. Another contract for ex-US hard coking coal is said to have been signed at $325/mt CFR, though without confirmation by the time of publication.
Meanwhile, coke prices in Tangshan are currently at RMB 2,860/mt ($449/mt) ex-warehouse, moving up by RMB 200/mt ($31.4/mt) compared to December 31, according to SteelOrbis’ data. During the given week, coke prices in China moved up amid rising capacity utilization rates at coking plants. Moreover, given recent developments, coke prices in China are expected to move up further. In the meantime, ex-China coke is available at $500/mt FOB.
$1 = RMB 6.37869