Wednesday, March 26, 2014

Asian seaborne hard coking coal prices steady on thin trading

Asian seaborne hard coking coal spot prices were largely unchanged on Wednesday March 26 amid thin trade, with rumors emerging of some market tightness into May.

Premium hard coking coal prices edged lower, with prices for lower grade material prices making a marginal recovery.

Hard coking coal index for material sold on a cfr Jing tang basis was calculated at $120.95 per tone on Wednesday, down by $0.57 from prices seen on Tuesday.

The premium hard coking coal index fob Australia's DBCT port was $110.30, down by $0.60 from Tuesday.

The cfr hard coking coal index stood at $110.70 per tone on Wednesday, up by $0.13 per tone. The fob value was $100.26 per tone, up by $0.18 from Tuesday.

Credit concerns in China have made sellers more cautious as defaults were heard more frequently.

The market outlook remains mixed. On one hand, Chinese domestic coal producers are expected to lower their prices again in April. On the other, slightly lower port stock levels, and a destocking process that is near a conclusion, could prompt some buyers to return to the market.

In addition, the largest spot seller - the BHP Billiton Mitsubishi Alliance - was heard to have tighter supply for May-laycan cargoes.

"There may be some support in prices, but the rebound will not be amazing," a trading source said.

China imported just 3.54 million tones of coking coal in February, down from the 5.7 million tones recorded in January, according to Chinese customs data released on Wednesday.

The combined import volume for the first two months of 2014 was also 26.3% lower compared with the corresponding period in 2013.

The most-traded September coking coal futures contract on the Dalian Commodity Exchange closed 1 Yuan ($0.16) per tone higher on Wednesday, at 826 Yuan ($134) per tone.

The most-traded September coke contract closed 12 Yuan ($2) per tone lower at 1,204 Yuan ($196) per tone.

The Yuan prices are the equivalent of cfr prices plus 17% VAT and port charges of about 35 Yuan ($6) per tone.

Separately, Australia's Bureau of Resources & Energy Economics forecast that the quarterly benchmark prices will average $128 per tone fob Australia this year. Its estimate in December last year was $150 per tone fob.