Struggling to lower their production costs amid weak steel margins and tight cash flows, Chinese steelmakers have sought further reductions in prices for metallurgical coke. Expecting to see increased supply of coking coal due to a thaw in relations between China and Australia and also somewhat lower prices, Chinese suppliers of met coke, in their turn, have been quite flexible in complying with requests. Consequently, since the beginning of January, met coke prices have been cut for the second time, by RMB 100-110/mt ($14.7-16.2/mt) in China.
Meanwhile, in the export segment, the latest offers for met coke (CSR 65/63%) have been heard at $400/mt FOB.
In the coking coal segment, although Russian suppliers have started gradually to return to the market after the holidays, no firm fresh offers have been heard so far. Most market players explain this by the delayed fulfilment of obligations of previous orders. “All is greatly delayed due to the congestion on railways. No new offers have been heard. You can secure material only from stocks at unchanged prices,” an international trader commented. “All fresh offers are delayed. Some suppliers are going to settle old cargoes first,” another Singapore-based trader said, confirming the current developments. Meanwhile, a Russian mining company is said to be quite active after the holiday period. Specifically, SteelOrbis has heard about its tenders for K10 coking coal, K9 middlings, PCI, with each cargo for 21,000 mt, with delivery in January. The deadline for bids in all tenders is tomorrow, January 11. With bearish sentiments in the Chinese market having increased lately, customers expect to get lower prices compared to those in the previous bookings. For instance, the latest tender for ex-Mechel K10 coking coal was booked at $270/mt CFR China.