Seaborne premium hard coking coal prices have inched up this week, as the Chinese steelmakers were heard to exhibit stronger buying intent amid urgent restocking needs; while the 64 mid-vol prices remained mostly stable over the past two weeks.
Despite signs of strong buying interest observed in the Chinese market, certain sellers still appeared to hold back and wait, while end-users and traders were actively seeking spot tonnages.
Further, the Chinese market saw consistent demand for Australian hard coking coal – particularly with low ash content – although the current tight supply of low ash coking coal cargoes in the spot market might prove challenging to fulfill such a specific need in coal blending.
Tangshan faces steel production curbs
In Tangshan, China’s biggest steelmaking city, the government has ordered output cuts at local blast furnaces and converters throughout May.
Accordingly, northern China end-users are subjected to hefty output cuts and hence, are expected to require lesser coking coal quantities.
Nevertheless, market sources are optimistic that prices for premium hard coking coal with superior quality should be supported even as demand slows down.
China imports higher volumes of Australian steelmaking coal in March
Chinese coal imports from Australia have risen by 24.3% on a month-on-month basis to 7.72 MnT in Apr’19, against 6.21 MnT in Mar’19, as per the latest vessel lineup data compiled by CoalMint Research.
Notably, Chinese traders had curtailed purchases of both thermal and metallurgical coal from Australia earlier this year, in light of extended quality checks on Australian coal.
It’s worth noting that this delay on custom clearances for Australian coal was largely perceived as a retaliatory effect on the part of China’s foreign ministry—imposed after Australia banned China’s telecoms giant Huawei Technologies, per Reuters data.
Consequently, Australia’s thermal coal shipments to China continued to decline; however, Australia’s hard coking coal exports to China rose considerably in March from February.
PRICE ASSESSMENTS
Latest offers for the Premium HCC grade are assessed at around USD 209.25/MT FOB Australia, higher by USD 3/MT above the closing rate of USD 206.25/MT that prevailed in the week gone by (as on 3 May’19).
Offers for the 64 Mid Vol HCC grade are assessed at around USD 182.55/MT FOB Australia.
For Indian buyers, the above offers amount to USD 221.65/MT and USD 194.95/MT respectively on CNF India basis.
Source: CoalMint Research
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