China’s coking coal and coke futures extended the rise on April 1, as market participants remained generally optimistic about the demand after the pandemic.
On April 1, the most-traded coking coal contracts for May delivery on the Dalian Commodity Exchange was closed at 3,244.0 yuan/t, up 1.76%; the most-active coke futures was ended at 3,997.0 yuan/t, up 2.09%.
It is remarkable that the coke futures reached an intraday high of 4,008.5 yuan/t, hitting a historical high.
The strength in the ferrous raw materials futures market reflected positive views over the market in April, when this wave of COVID outbreaks is expected to be effective under control and demand from construction and manufacturing industries would resume concentratedly in the traditional peak season for steel and steel-making materials.
Besides, optimism over prospects of additional support from the policy-making side to promote a faster recovery of economic activities of the world’s largest steel producer has also lent some support to the steel-making raw material.
Affected by still tight road transportation restrictions, coke supplies remained unevenly distributed, with production areas holding a large volume of inventories yet consumption areas feeling hard to seek supplies.
Even though Tangshan, the leading steel city in Hebei, has lifted lockdown in some districts, transportation within the city was still not smooth due to inspections. Local mills plan to raise production along with the further removal of restrictions and hold strong restocking interests, Sxcoal learned.
Some traders have started to make bargain-hunting and the traffic flow from production areas to the eastern ports increased. Sxcoal learned the freight rate from Xiaoyi, Shanxi to Rizhao port in Shandong was stable at 265-270 yuan/t, without VAT.
On April 1, Fenwei assessed the Quasi Grade I coke in Shandong at 3,700 yuan/t, FOB Rizhao port with VAT, up 80 yuan/t from the preceding day.
The assessment for Quasi Grade I coke in Shanxi was at 3,360 yuan/t, ex-plant with VAT, and Tangshan Quasi Grade I coke in Tangshan at 3,560 yuan/t, delivered basis with VAT, both unchanged.
Coking plants accelerated the build-up of coking coal inventory to prepare for expected robust demand in April. Auctions at coal mines in Shanxi were concluded with higher a premium from the starting levels, Sxcoal learned.
On April 1, Fenwei CCI index for Shanxi low-sulfur primary coking coal was at 3,215 yuan/t, ex-washplant with VAT, unchanged from the preceding day.
Note: This article has been exchanged under the article exchange agreement between CoalMint and Sxcoal.
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