Wednesday, November 13, 2013

Seaborne coking coal prices edge lower on weaker bids

Seaborne coking coal prices edged lower on Wednesday November 13 on weakening bids.
Prices for premium hard coking coal cfr Jingtang were calculated at $157.38 per tonne, down by $1.44 on the day.

Premium hard coking coal prices fob DBCT (Australia) were calculated at $142.94 per tonne on Tuesday, down by $0.95 from levels seen on Monday.

Hard coking coal fob DBCT was calculated at $127.62 fob per tonne, down by $0.64 per tonne on the day.

Hard coking coal prices cfr Jingtang moved slightly higher and were calculated at $142.38 per tonne, an increase of $0.25 on the day.

Offers remained stable at $157-162 per tonne cfr for premium hard coking coal to China, while bids drifted down $0.50-1, according to producers and consumers contacted by Steel First.

“Generally, coking coal priced at above $150 cfr China is not easy to sell,” a coking coal trader in Tianjin said.

While sentiment is bearish, the trader said that there was little fundamental downward pressure on prices at the moment, given the generally stable macroeconomic environment, expected restocking in winter and higher domestic coal and coke prices.

Preliminary grade I coke prices in northern China have risen by 30 yuan ($5) per tonne so far this week to 1,440-1,460 yuan ($235-238), the trader said.

“There are not many cargoes from mining companies available for booking at the moment either, which could be due to seasonal reasons, but the direction spot coking coal prices take will depend on Chinese demand,” a trader in Shanghai said.

The most-traded May hard coking coal contract on the Dalian Commodity Exchange closed at 1,123 yuan ($183) per tonne on Wednesday, up by 1 yuan ($0.16) per tonne from Tuesday.

The most-traded May coke contract on the same exchange closed at 1,597 yuan ($261) per tonne, up by 10 yuan ($1.63) per tonne from the previous day’s close.

Monday, November 11, 2013

Thin trade sees seaborne spot coking coal prices hold steady

The spot seaborne coking coal market remained lacklustre at the start of the week with mills showing little buying interest.

“Traders who had built up their inventories are panicking because, while they are trying to sell their cargoes at the ports, steel mills are reluctant to buy because they have ample stockpiles,” a trader in Tianjin city told Steel First.

“Offers from miners remain high. They were $3 per tonne higher than indices,” a trader in Shanghai said.

However, a trader in Shanghai said the pressure to sell is on trading companies rather than miners, as miners have already sold out most of their cargoes.

Prices for premium hard coking coal cfr Jingtang were calculated up by $0.31 on the day at $159.87 per tonne. Hard coking coal prices cfr Jingtang were calculated at $143.47 per tonne, an increase of $1.39 on the day.

Premium hard coking coal prices fob DBCT (Australia) were calculated at $145.60 per tonne on Friday, down by $0.19 from levels seen on Friday.

Hard coking coal fob DBCT was calculated at $128.78 fob per tonne, down by $0.18 per tonne on the day.

Capesize freight costs from Queensland to Jingtang were quoted to Steel First at $13 per tonne per day on Friday, with panama rates quoted at $17-18 per tonne per day.

The most-traded May coking coal contract on the Dalian Commodity Exchange closed at 1,116 yuan ($182) per tonne on Monday November 11, up 2 yuan ($0.30) per tonne from last Friday.


The exchange’s most-traded May coke contract closed at 1,571 yuan ($256) per tonne.

Friday, November 8, 2013

Spot coking coal prices edge to top of established range

The spot seaborne coking coal market remained sluggish on Friday November 8, with transactions and enquiries both being scarce.

Index prices edged up on transactions heard completed at the higher end of established ranges, but sources said that buyers’ needs were largely covered to the end of the year and they remained bearish on prices.

Prices for premium hard coking coal cfr Jingtang were calculated up by $1.02 on the day at $159.56 per tonne. Hard coking coal prices cfr Jingtang were calculated at $142.08 per tonne, an increase of $0.81 on the day.

Premium hard coking coal prices fob DBCT (Australia) were calculated at $145.79 per tonne on Friday, up by $0.81 from levels seen on Wednesday.

Hard coking coal fob DBCT was calculated at $128.15 fob per tonne, down by $1.42 per tonne on the day.

Freight costs from Queensland to Jingtang were quoted to Steel First at $13 per tonne per day on Friday.

“The majority of buyers remained on the sidelines today and were reluctant to make new bookings,” a trader in Tianjin said.

A cargo of Carborough Downs coking coal was offered at $130 per tonne fob Australia, laycan November 20, he added.

A cargo of German Creek premium hard coking coal was heard sold at $160-161 per tonne.

Assessments of premium hard coking were in the range of $160-161 per tonne cfr China.

Coking coal inventories at steel mills, coke plants and Chinese ports are all at high levels, due to slack demand.

“There’s little buying interest for cargoes at ports, let alone those at sea,” a trader in Hebei province said.

The most-traded May hard coking coal contract on the Dalian Commodity Exchange (DCE) closed at 1,114 yuan ($181) per tonne on Friday, down by 16 yuan ($3) per tonne from the previous day’s close.

The most-traded May coke contract on the DCE closed at 1,567 yuan ($255) per tonne on Friday, down by 26 yuan ($4) per tonne from Thursday’s close.

Metallurgical coal market to Grow 51% by 2035

Metallurgical coal market is expected to reached 394 million mt by 2035, 51% above the 2012 level of 261 million mt, Jim Truman, principal analyst with consultant Wood Mackenzie said Tuesday.

Speaking at the Met Coke World Summit in Pittsburgh, Truman said most of the growth will occur in Asia because of the growing Chinese and Indian economies. Asia accounts for about 69% of coal demand with the remaining 31% in the Atlantic market.

Despite being the world's biggest producer of metallurgical coal, China will continue to import material because domestic production is projected to remain flat, Truman said. Shanxi's coal production will "tend to look like the production from Central Appalachia," Truman added. The Central Appalachia region used to be a key coal mining industry in the US before began a slow decline in recent years. The Shanxi province is the key metallurgical coal centers in China.

"[The] depth of coal seams are quite large [in Shanxi] and a lot of obstacles are present" to prevent much new production, he said.

Indian coal producers are mining a product that cannot be used in steelmaking because of high ash content, meaning there is 'very little potential for much market growth," Truman said.

He said Australia would most likely stand to see the greatest benefit from the increase in Asian demand for imported met coal, given the fact that it has the lowest cost structure of all exporters.

Truman estimated that Australia could capture 83% of the projected growth by 2030 if the production market remains as it is.

The US, as a swing-supplier in the world, is expected to continue to decline in the export market by losing 13 million mt of its exports by 2030, Truman added. Lower cost material offered by other countries including Colombia in South America was the key reason, Truman explained.

In terms of price expectations, Truman believes spot prices for premium low-vol coals are unlikely to drop to the $210-220s/mt FOB Australia level seen in 2010-2012.


Platts assessed the spot price Tuesday at $155.25/mt FOB Australia for coal with similar grade.