China’s coking coal miners are making upward adjustments on their offers after the downstream coking plants completed the second round of 200-220 yuan/t price hike, but their pricing is expected to be prudent as higher increment could cloud the demand sustainability.
One Jinzhong-based miner in Shanxi saw his online auction for 2,000 tonnes of primary coking coal (S 0.8%, A 10.5%, G 90) fail at the starting level of 2,550 yuan/t on August 16, citing high offers kept bidders away.
This suggests the market needs time to digest the previous rise. While there have been far fewer aborted online auctions than at the start of the month, most miners tend to raise their offers modestly to test the water or temporarily maintain prices unchanged until there are larger increases in trading premiums.
On August 17, one miner in Taiyuan of Shanxi put 5,000 tonnes of low-sulfur meager lean coking coal (S 0.8%, A 10.5%, G 10) for auction with a starting price of 1,450 yuan/t, which was up 50 yuan/t compared with July 29. The trade was finally reached at 1,535-1,540 yuan/t, while the previous auctions failed to fetch results.
On the same day, an online auction of 5,000 tonnes of fat coal (S 0.5%, A 14%, G 90) in Luliang of Shanxi was concluded at 2,000-2,005 yuan/t with a premium of 0-5 yuan/t from the starting level. The miner’s last auction on August 5 also started at 2,000 yuan/t but failed to conclude.
Although miners remained in a cautious stance in pricing, their confidence in the near-term price trend is turning positive as coke firms are increasing their orders with improved coke-producing margins after the recent price uptick.
As of August 17, two leading steelmakers in Hebei and Shandong had agreed to raise their buy prices for coke by 200-220 yuan/t, marking the completion of the second round of coke price hike, which brought the accumulative increase to 400-440 yuan/t so far in the month.
Imported Mongolian coking coal offers also picked up following growing inquiries from Chinese buyers.
Mongolian raw coking coal offers climbed to 1,530-1,550 yuan/t, ex-stock Ganqimaodu on August 16, up by 20-40 yuan/t compared with the start of the week.
Trading activities have revived up since the Ganqimaodu border crossing resumed outward coal dispatches on August 13.
Inflows of Mongolian coal stayed at high levels. On August 18, Ganqimaodu border port let in 540 trucks loaded with the supply. The daily average of arrivals stood at 527 trucks in the month to August 16, slightly higher than the same period in the preceding month but surging from 152 trucks in the year-ago period, Sxcoal’s tracking data showed.
In the seaborne coal market, China’s buying appetite remained lacking in steam. An indicative offer of Canadian premium mid-vol standard coking coal was heard at $288/t CFR China, with a late August laycan, while some indicative bids were $20-25/t lower.
Note: This article has been exchanged under the article exchange agreement between CoalMint and Sxcoal.
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