As the steps of Chinese authorities to shore up an economy battered by repeated Covid-19 lockdowns and a property market crisis have continued to fail in yielding any positive results, the future prospects of the steel industry in China have remained uncertain. Given that, Chinese steelmakers prefer to stay cautious in new bookings of raw materials, which may exert a negative pressure on the suppliers of coking coal and coke in the future, although the latter have continued to gain certain success in the latest deals.
Accordingly, following a transaction at $220.10/mt CFR China, Russia's Mechel has managed to sell a 21,000 mt cargo of K10 coking coal, with prompt laycan at $226/mt CFR China in the middle of last week. “These prices are extremely high in my opinion, taking into account the current market developments,” a major international trader commented. Besides that, SteelOrbis has heard of a recent 21,000 mt sale of low-volatility pulverized coal injection (PCI), with prompt laycan at $190.60/mt CFR China. Afterwards, bids from Chinese customers have declined to $180-185/mt CFR, according to sources. Meanwhile, a cargo of lower quality PCI, with ash content not higher than ten percent, was booked at $175/mt CFR China lately. “I expect there will be again pressure on the coal and iron ore. The market in China is not stable enough,” a trader stated. In the meantime, the latest transactions for ex-Russia Inagli coking coal have reportedly been at $175-180/mt CFR, while Deni Deep coking coal has changed hands at $195-200/mt CFR, down $5/mt from the levels the supplier has been initially seeking to get.
Offers from North America, in particular that from Canada at $288/mt CFR China and an offer for ex-US Blue Creek No.7 at $330/mt CFR China have remained out of buying interest in China.
In the meantime, local prices for prime quality coking coal with ash content not higher than 10.5 percent have been settled at RMB 2,150/mt ($315.8/mt) ex-works, up RMB 100/mt ($11.7/mt) to the previous levels.
Ex-China export prices for 25-90 mm blast furnace (BF) grade coke (62/60% CSR) have increased to $410-420/mt FOB, up $5-15/mt from the middle of August. Nevertheless, some market sources claim that at such levels the material with 62/65% CSR is possible to buy, while 62/60% CSR coke is available at $390/mt FOB. “During negotiations $400-410/mt CFR levels can be achieved, but not below for a good quality,” a Chinese coke exporter stated. In the meantime, ex-Colombia metallurgical coke 65% CSR is offered at $350-370/mt FOB, according to traders. “Being cheaper than China only by $30-40/mt is already expensive,” a market source stated.
Following a second successive round of price hikes average first-grade coke prices in China have been settled at RMB 2,950/mt ($435/mt), as SteelOrbis reported earlier.
Meanwhile, sentiments towards the future developments at Dalian Commodity Exchange (DCE) have turned into utterly bearish. Accordingly, on Tuesday, August 23 coking coal futures prices have settled at RMB 1,958.5/mt ($286/mt), down RMB 237.5/mt ($35/mt) during the week and down RMB 2.5/mt ($0.4/mt) day on day, respectively. Meanwhile, coke futures prices have dropped by RMB 417.5/mt ($61/mt) to RMB 2,583/mt ($377.5/mt) within the given week and down RMB 26/mt ($4/mt) day on day.