Monday, January 21, 2019

Thin trading keeps seaborne market largely stable

The seaborne coking coal market had a quiet start to the week, with many participants holding out for more transactions to emerge to set the tone for prices.

Some 25,000 tonnes of a premium mid-vol product were traded at $193 per tonne fob Australia, market sources told Fastmarkets on Monday January 21. 

Chinese market participants are taking a break from procuring seaborne materials because “we are waiting for more transactions this week for a clearer market direction”, a trader in China said.

A southern Chinese mill source said buyers were taking their time with purchases because there were plenty of January and February cargoes.

“It’s a backlog of cargoes since China did not buy in the last two months [of 2018] due to Chinese port restrictions,” he added.

At the Tangshan Port of Jingtang in Hebei province, premium hard coking coal was offered around 1,580-1,650 yuan per tonne - equivalent to about $196-205 yuan per tonne cfr China in the seaborne market - according to various sources in the city.

“Coke plants proposed an increase of 50 yuan ($7.40) per tonne last week but this was rejected by mills in the end. We are not planning to buy anything until after the Chinese New Year [on February 5],” a coke plant source in Tangshan said.

Amid concerns that emerged last Friday over the closure of berths at the Abbot Point Coal Terminal in Queensland, Australia due to incidents relating to safety, a spokeswoman for the port operator has confirmed that Berth 2 is indeed closed for Ship Loader 2 to undergo unscheduled maintenance. 

The port operator expects this to be completed in the middle of this week.

“There is no impact to trade with Berth 1 remaining operational as normal,” she said.

The Dalian Commodity Exchange’s most-traded May coking coal futures contract closed at 1,214 yuan per tonne on Monday, down 24 yuan per tonne from last Friday.

The most-traded May coke contract closed at 2,030 yuan per tonne, down 35.50 yuan per tonne for the day.

Fastmarkets’ MB cfr China Premium Hard Coking Coal Index fell $0.37 per tonne to $193.43 per tonne during the day while its fob Australia equivalent rose $1.71 per tonne to $194.11 per tonne.

The hard coking coal indices were unchanged, at $181.30 per tonne cfr China and $172.15 per tonne fob Australia.

The low-vol pulverized coal injection indices were also flat, at $137.44 per tonne cfr China and $125.13 per tonne fob Australia.