Monday, February 24, 2014

Asian coking coal buyers remain on sidelines amid plentiful supply

The Asian seaborne hard coking coal spot market remained sluggish on Friday February 21 as most participants stayed on the sidelines.

Premium hard coking coal index for material sold on a cfr Jingtang basis was calculated on February 21 at $135.88 per tonne, up $0.19 from levels seen on Thursday.

The premium hard coking coal index fob Australia’s DBCT port also edged higher, pushing up $0.68 to $126.22 per tonne.

The cfr hard coking coal index stood at $124.22 per tonne, down $0.41from the previous day. The fob value remained unchanged at $114.25 per tonne

“Several end users did a bit of restocking late last week and earlier this week, but supply outstrips demand now”.

Those who did make purchases bought only small volumes. Several market sources said they had seen fewer Capesize vessels recently as buyers opted for the smaller Panamaxes. Also, some buyers asked for two to three different brands in one Panamax vessel.

“The market is still pretty weak,” a trading source in Shanghai said. “Steel product sales remain lacklustre and domestic coal prices are expected to fall further next month.

Prime hard coking coal from Liulin, Shanxi was reportedly quoted at 1,060 yuan ($173) per tonne ex-works inclusive of VAT, down 10 yuan ($2) from levels seen last Friday.

The most-traded May coking coal futures contract on the Dalian Commodity Exchange closed 1 yuan lower at 932 yuan ($152) per tonne on Friday, but up from last Friday’s close of 926 yuan ($151) per tonne.

The most-traded May coke contract on the exchange also closed 6 yuan ($1) lower on the day at 1,328 yuan ($217) per tonne, compared with last Friday’s close of 1,316 yuan ($215) per tonne.


The yuan prices equal cfr prices plus 17% VAT and port charges of around 35 yuan ($6).

Tuesday, February 18, 2014

Hard coking coal prices steady-to-soft on low demand

The Asian hard coking coal spot market was largely unchanged on Monday February 17 as mixed signals led participants to adopt a wait-and-see approach.

Spot prices for coking coal sold out of Australia saw values edge lower.

Premium hard coking coal index for material sold on a cfr Jingtang basis edged up by $0.02 to $136.57 per tonne.

Premium hard coking coal index prices fob Australia’s DBCT port fell by $0.10 per tonne on Monday, to $126.09 per tonne.

The price for hard coking coal stood at $125.17 per tonne cfr Jingtang, falling by $0.64 on the day.

The index price for hard coking coal fob Australia fell $1.20 to $113.14 per tonne.

Shanxi Coking Coal was said to be looking at another price cut of 40-60 yuan ($7-10) per tonne, following a 20-50 yuan ($3-8) per tonne decrease earlier this month.

In Tangshan, the price of steel billet rose by 20 yuan ($3) per tonne over the weekend and by a further 60 yuan ($10) per tonne on Monday to reach 2,920 yuan ($479) per tonne ex-works.

“Billet prices are up because the tighter environmental regulations may cause production to come down,” a trading source in Shanghai said. Market sentiment seemed a little better on Monday, he added.

“We’re cautious about booking cargoes at the moment. Prices seem to be going down further but, if we agree on index-linked pricing, what happens if the market goes up in March?” a Beijing-based trader said.

A mill source said that stock levels remained high and the steelmaker had little interest in procuring spot materials.

A total of 5.15 million tonnes of coking coal was reported to be sitting at Jingtang port on Monday, down from 5.3 million tonnes a week earlier. Rizhao port had 2.15 million tonnes in stockpiles, also down from 2.17 million tonnes on February 10.

The most-traded May coking coal futures contract on the Dalian Commodity Exchange closed at 947 yuan ($155) per tonne on Monday, up from Friday’s close of 926 yuan ($152) per tonne.

The most-traded May coke contract on the exchange also closed higher at 1,354 yuan ($222) per tonne, compared with the previous close of 1,316 yuan ($216) per tonne last Friday.

Elsewhere, Anglo American’s coking coal business reported an 89% year-on-year drop in profits, according to a results statement published by the company on February 14, despite achieving record output.

The miner saw underlying operating profit for its metallurgical coal business drop to $46 million at the end of 2013, from $405 million a year earlier.