China’s Imported Coking Coal Prices Hit Over Two-Year Low

Imported coking coal prices for both Australian and Mongolian supplies delivered to China have hit their respective two-year lows, on sustained weakness in consumer demand due to the tightening of import restrictions imposed at several ports across China.

On November 8, the price of Australian coking coal, with 10.5% ash and 0.6% sulphur, fell by USD 16/MT week-on-week to USD 147/MT CNF China.

On the same day, the price of Mongolian coking coal, with 11% ash and 0.7% sulphur, slipped by USD 4.3/MT week-on-week.

Amid the sluggish demand, not only imported cargoes, China’s composite domestic coking coal price also fell to a new low of Yuan 1,129.3/t as of November 8.

Low demand in China saw some ports in South China’s Guangdong and Southeast China’s Fujian province suspend accepting the application of imported coking coal Customs clearance since late October, as they have hit the “coal import quota”, as reported.

“Key coking coal import ports North and East China are still clearing seaborne coal for now, but it is a question mark whether they will ban coal imports sometime in the future all of a sudden,” a Shanghai-based analyst said, “and this makes Chinese buyers more conservative in booking seaborne coal,” he added.

As of November 7, total imported coking coal stocks at the five major ports comprising Jingtang in North China, Qingdao, Rizhao, Lianyungang in East China and Zhanjiang in South China declined to the six-week low of 7.2 million tonnes, down another 330,000 tonnes or 4.4% on week, or having fallen for two weeks, mainly because of lower arrivals of new cargoes.

However, new coking coal arrivals may pick up in December because of the robust booking in October.

As for Mongolian coal imports, usually by road via Ganqimaodu checkpoint, the largest gateway at the Mongolia-China border in North China’s Inner Mongolia, saw the daily trucking volume average 600 units/day at the end of last week, or some 200 units/day lower on week.

China’s subdued coke market has been lowering Mongolian coal imports, according to a second analyst in Shanghai, adding, “the high piles of processed Mongolian coal at the checkpoints along the Sino-Mongolia border have also weighed on the coal prices.”