Coking coal and met coke prices surpass multiyear highs in China—
China-delivered coking coal import prices have risen over the past month, following restrictions on imports from Australia; while sustained high prices of Chinese domestic met coke have been supportive for the global market by attracting imports by end-users in China.
Globally, demand for met coke has outstripped supply as steelmakers have increased steel production post lockdowns, creating demand for more raw material input.
Meanwhile, the tight supply of coking coal in China has remained unchanged with Mongolia having limited availability and restrictions on Australian coal showing no signs of easing.
Besides, governmental notices of production cuts are issued on environmental concerns in major coal-producing provinces such as Shandong, Shanxi, Hebei and Henan, leading to further shortage of coking coal and met coke supplies.
A total of 63.5 mn t coking capacity has been phased out in 2020, while newly added capacity has been 42.14 mn t, equating to a net reduction of 21.36 mn t. The total phased out capacity during January-June 2021 will be 15.33 mn t against new addition of 32.6 mn t, equating to a net increase of 17.24 mn t.
Price Assessments—
CoalMint assessed the latest price for domestic met coke with 12.5% ash in North China at CNY 2,440/t ($380.99/t), up CNY 80/t ($12.16/t) on the week, with more upticks expected.
CNF China prices for met coke from major origins have increased by approximately $10/t week-on-week and are currently assessed at $340/t (Japan), $335/t (Poland), $325/t (South Korea) and $325/t (Russia).
Outlook—
Accordingly, market sources expect a firm outlook on met coke prices continuing into early January 2021 although rising steel prices in China have been helping absorb higher raw material costs of met coke and coking coal.
Nevertheless, Chinese market participants are presently heard adopting a cautious stance following the consistent price upticks in recent months. With surging prices of steelmaking raw materials, including both coking coal and met coke, steel mills may possibly curtail their trading activity to reassess their procurement plans.
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