With a new package of economic stimuli which could fuel infrastructure projects and boost demand having been announced in China, Russian suppliers of coking coal have continued to succeed in getting higher prices for coking coal in China. Nevertheless, the sentiments with regard to the sustainability of the uptrend and future developments in general have remained controversial among market players. The continuing devaluation of the Chinese yuan (CNY) against the US dollar may cast even more doubt on the further rise of prices. Specifically, on Monday, August 29, the Chinese currency lost about 0.7 percent against the dollar and was traded at 6.9277, the lowest level since August 2020.
Meanwhile, in the latest round of sales to China, Russia's Mechel managed to get higher prices once again. Specifically, a 21,000 mt cargo of K10 coking coal, for prompt shipment has been booked at $233.1/mt CFR compared to $229/mt CFR fixed in the previous trade, while a cargo of low-volatility pulverized injection (PCI), also for prompt shipment has changed hands at $193/mt CFR. “I still doubt the feasibility of transactions at such high prices, given the still low economic fundamentals,” a Chinese source stated.
In the meantime, ex-Mongolia washed coking coal is reported to have been offered at RMB 1,900-1,930/mt ($274-279/mt) ex-warehouse.
As of Monday, August 29, the most traded coking coal futures at Dalian Commodity Exchange (DCE) have been traded at RMB 1,963.5/mt ($284/mt), down RMB 86.5/mt compared to Friday, though the trades started at RMB 2,050/mt. Coke futures prices have also failed to remain at the previous levels and have decreased by RMB 132/mt ($22/mt) to RMB 2,561/mt ($370/mt).
$1 = RMB 6.9247