Tuesday, October 20, 2015

PCI coal trading activity picks up on seaborne market

A couple of transactions involving pulverised coal injection (PCI) coal were reported on the metallurgical coal market on Monday October 19.

A few cargoes of November-laycan mid-vol PCI materials were heard sold to China at $70-71 per tonne cfr, sources said.

However, market participants warned that a potential supply increase in the fourth quarter could weigh on the spot market, in the face of sluggish demand in the winter season and competitive domestic materials.

"Unless there are adverse weather conditions in northern China during winter [which would affect domestic coal production], the demand for imported coking coal will remain sluggish," a trading source told Steel First.

Trading activity outside China was limited. Enquiries were heard from India and Europe, but buying interest remains thin, sources added.

On Global Coal, a 75,000-tonne cargo of premium hard coking coal under the branded bracket was traded at $77.75 per tonne fob Australia. It is not known at the time of writing which of the five brands – Goonyella, Oaky Creek, Moranbah North, North Goonyella and Illawarra – was involved in the transaction.

The cargo's laycan is in December, according to a source with knowledge of the transaction.

Steel First’s cfr Jingtang premium hard coking coal index rose $0.55 per tonne to $86.28 per tonne on Monday, while the fob Australia premium hard coking coal index rose $0.29 per tonne to $80.68 per tonne. 

Both the hard coking coal indices were flat, at $81.71 per tonne cfr and $74.84 per tonne fob. 

On the Dalian Commodity Exchange, the most-traded January coking coal futures contract closed 0.50 yuan ($0.10) per tonne higher for the day, at 565.50 yuan ($89) per tonne. The most-liquid January coke contract closed 4 yuan ($1) lower, at 735 yuan ($116) per tonne.