Coking coal prices remained buoyed in Shanxi at the start of the week backed by resilient purchases from downstream coking plants, although prices showed signs of stabilizing in Inner Mongolia following a sharp rise in the preceding week.
On January 17, the Fenwei CCI index for Shanxi low-sulfur primary coking coal stood at 2,755 yuan/t, stable from late last week; the index for Shanxi high-sulfur primary coking coal was at 2,308 yuan/t, up 57 yuan/t from January 14.
Miners remained generally bullish over the near-term market, expecting coking coal prices to be further shored up by the suspension of production at some mines approaching the upcoming holiday in early February.
Sxcoal learned that some small mines in Inner Mongolia have already taken a holiday leave since January 15, and some plan to start the holiday around January 22. Major state-run miners in the region may arrange 3-day maintenance during the holiday.
Offers of mid-sulfur fat coal (S 1.8%, A 12%) stood at 2,000-2,100 yuan/t in Wuhai and surrounding areas in Inner Mongolia.
Coking coal supplies in Changzhi of Shanxi slightly increased at the start of the week as some mines have resumed production after they were requested to suspend production for the mass nucleic acid test due to a virus-contaminated fruit package.
The raw coal production at the surveyed mines declined 60,100 tonnes week on week to 9.17 million tonnes on January 13, while the capacity utilization at these mines retreated 0.6 percentage points to 91.1%, Sxcoal data showed.
Some auctions of high-sulfur primary coking coal (S 2.0-2.5%) in Liulin of Shanxi settled higher at 2,400-2,410 yuan/t, ex-washplant with VAT. Some miners with a large pre-sold volume were inclined to further raise prices, with some 2.3%-sulfur coking coal offers currently reaching around 2,600 yuan/t, Sxcoal learned.
One miner source told Sxcoal the company has stopped washing mid-sulfur primary coking coal and been mainly selling high-sulfur primary coking coal currently, but the firm plans to suspend committing new orders of the grade in several days for running out the 1.5%-sulfur and 1.3%-sulfur primary coking coal stocks.
“Gas coal prices further increase to around 1,600 yuan/t, ex-washplant with VAT,” said one Luliang-based source in Shanxi. Aside from production constraints with weakening production enthusiasm in the lunar year-end, the resurgence of the pandemic also helped accelerate the purchases from coking plants, the source added.
Some cities in China have reported the cases of Omicron strain, and followed was strict travel controls in those areas, which prompted some coke producers to speed up stock-building with growing concerns of possible supply disruption and the surge of transportation fees.
Coke market in impasse after 4th price hike proposed
A stalemate was observed between coke producers and steel mills over the fourth round of price hikes. Coking plants were confident in the market with tight supply-demand fundamentals, while steel mills were reluctant to accept the increase by reasons of potential tight steel production curbs late this month.
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