Hard coking coal market edges lower as China drops prices

The Asian hard coking coal spot market continued to move down on Wednesday January 22 as lower offers and a weak Chinese domestic market weighed on sentiment.

Premium hard coking coal index for material sold on a cfr Jingtang basis dropped by $2.05 to $140.40 per tonne on Wednesday.

Premium hard coking coal index prices fob Australia’s DBCT port dropped by $0.03 to $129.94 per tonne.

The price for hard coking coal stood at $130.00 per tonne cfr Jingtang, down by $0.11. Hard coking coal fob Australia edged up by $0.04 to $117.97 per tonne.

Shenhua Group has lowered the price of its coking coal products by 10-40 yuan ($2-7) per tonne as well as its coke price by 50 yuan ($8) per tonne. Several coking plants in Hebei province have also lowered their coke prices by 50 yuan ($8) per tonne.

Shanxi Coking Coal, on the other hand, is expected to cut the price of its coking coal products by around 50 yuan ($8) per tonne after the Chinese New Year, industry sources said.

A total of 4.89 million tonnes of coking coal was reported to be sitting at Jingtang port earlier this week, down from 4.99 million tonnes seen last Monday.

Stockpiles at Rizhao port stood at 2.15 million tonnes, also down slightly from the 2.16 million tonnes recorded a week ago.

However, sources said that trade may pick up if stockpiles at Jingtang fall to about 3.5 million tonnes.

The most-traded May coking coal contract on the Dalian Commodity Exchange closed at 931 yuan ($153) per tonne, up from Tuesday’s close of 927 yuan ($152) per tonne.

The most-traded May coke contract on the exchange closed lower by 2 yuan ($0.33) per tonne at 1,340 yuan ($220) per tonne.

US and Australian producers continue to offer competitive prices for high- and low-volatility coals respective to European steel mills.

High-volatility US coals were heard offered into Europe by East Coast producers at $117-124 per tonne fob.

Plentiful supplies depress premium seaborne hard coking coal prices

Plentiful seaborne coking coal supplies saw index prices for premium brands edge down on Tuesday January 14, although slightly higher offers saw hard coking coal index prices post a slight recovery.

Premium hard coking coal index for CFR  Jingtang basis edged down to $143.85 per tonne on Tuesday, a fall of $0.23 per tonne compared with Monday.

Premium hard coking coal index prices fob Australia’s DBCT port were calculated at $131.49, down $0.22 from levels seen on Monday.

The price for hard coking coal stood at $132.04 per tonne cfr Jingtang on Tuesday, up by $0.23 from Friday.

Hard coking coal prices FOB Australia also climbed, moving up by $1.10 per tonne to $119.94 on Tuesday.

“Bearish sentiment is still keeping people away from the market. No one would want to buy if they think the market might fall further,” a trading source in Singapore told Steel First.

Transactions are few and far between, but supplies in the market remain abundant, sources reported.

“The market overall is very weak. Many customers are out of the market simply because stock levels are high,” another trader said.

A total of 4.99 million tonnes of coking coal is reportedly sitting at the Jingtang port, up from 4.88 million tonnes last week. Rizhao port has 2.16 million tonnes of inventory, down from 2.29 million tonnes last week.

The most-traded May coking coal contract on the Dalian Commodity Exchange closed at 990 yuan ($163) per tonne on Tuesday, up from Monday’s close of 982 yuan ($161) per tonne. The most-traded May coke contract closed at 1,391 yuan ($228) per tonne, also up from the previous day’s close of 1,372 yuan ($225) per tonne.

US coal rail operator Norfolk Southern lifted a force majeure on rail shipments on Monday January 13, after severe weather halted all traffic originating, terminating or moving through the states of Virginia, West Virginia, Ohio, Indiana and Pennyslvania last week. 

East Coast coal producers were reported to be aggressively offering medium and high volatility material to the domestic and European markets.

Seaborne hard coking coal prices steady to soft on low buying activity

The seaborne hard coking coal spot market remained quiet on Friday January 10 as bearish sentiment persisted.

Steel First’s premium hard coking coal index for material sold on a CFR Jingtang basis edged down to $144.84 per tonne during the day, down $0.14 per tonne from Thursday.

Premium hard coking coal index prices fob Australia’s DBCT port were calculated at $132.21, down $0.28 from Thursday.

The price for hard coking coal stood at $131.71 per tonne CFR Jingtang on Friday, unchanged from Thursday’s levels.

Hard coking coal prices FOB Australia were also unchanged, seen at $118.84 per tonne.

“It’s not about prices these days. It’s good enough to have even some buying interest,” a trading source in Rizhao told Steel First.

High stock levels, tight credit conditions and lower domestic coke prices have all been cited as factors limiting appetite for forward cargoes.

Market participants considered top Australia brands tradable at about $145 per tonne CFR China and second-tier hard coking coal at below $135 per tonne CFR China, down $1-2 per tonne from earlier this week.

Port sales remained difficult. Deals heard this week were about 30-50 yuan ($5-8) per tonne lower than trades achieved two weeks ago, sources said.

The most-traded May coking coal contract on the Dalian Commodity Exchange closed at 984 yuan ($161) per tonne on Friday, up 6 yuan ($1) from Thursday’s close, but down 2 yuan ($0.30) from last Friday.

The most-traded May coke contract on the exchange closed at 1,382 yuan ($226) per tonne, up 10 yuan ($2) per tonne from a day earlier, but down 44 yuan ($7) per tonne, or 3.1% from a week ago.

Icy conditions gripping much of the northern USA have seen affected shipments on Norfolk Southern’s rail line. The rail operator warned customers earlier this week that freight on the line could be affected. A trader source in Europe said that coking coal prices were yet to reflect any shipment delays.