With unsatisfactory demand for finished steel and bearish sentiments prevailing among market participants, Chinese steelmakers have maintained their attempts to lower production costs. Consequently, coke suppliers have had no other choice but to reduce their offers further in order to secure orders. As a result, the number of deals concluded for import coking coal has dwindled almost to nothing in China, with most buyers insisting on lower prices.
Accordingly, coke prices in Tangshan have declined by RMB 200/mt ($29.6/mt) compared to May 13, to RMB 3,260/mt ($483/mt) ex-warehouse, according to SteelOrbis’ data.
This week, Chinese suppliers have been active in the export market, as SteelOrbis reported earlier. Specifically, two deals for around 70,000 mt in total of ex-China 25-90mm of BF grade metallurgical coke (64% CSR) have been done to India at $580/mt CFR and $600/mt CFR. A week ago, the abovementioned figures but on FOB basis were voiced in offers from China to India.
In the meantime, negotiating with Russian suppliers of coking coal, Chinese customers have continued to insist on lower prices. Specifically, early this week bids for ex-Russia K10 coking coal were heard at $280/mt CFR, at least $20/mt lower compared to offers. “It is a silent market now, almost dead, though prices have declined from $360-370/mr CFR three weeks ago. It is about time the Chinese are lifting the Covid restrictions. These restrictions are pushing down everything and people are on standby. Later, it might shoot up like a rocket,” an international trader commented. No fresh offers from North America to China have been heard so far, quite probably due to the great gap between the levels targeted by suppliers and the workable levels for Chinese customers.
Meanwhile, in the futures market sentiments differ from the spot market. On balance, as of Friday, May 20 coking coal prices at Dalian Commodity Exchange (DCE) have increased by 3.7 percent week on week, to RMB 2,670/mt ($399/mt), while coke futures prices have settled at RMB 3,476/mt ($515/mt), rising by RMB 136/mt ($20.2/mt) or 4.1 percent compared to May 13.
$1 = RMB 6.7487