China’s coking coal prices are expected to hover at high levels for the rest of December, some participants told Sxcoal, owing to the sustained resilient demand from the downstream coking plants, whose coal inventories stood at a low-to-medium level.
However, coke firms are still likely to shun purchases of some high-priced supplies due to losses, and this could force some miners to revise down offers so as to be aligned with the prevailing offers.
“Judging from the continued trading enthusiasm in online auctions, it is unlikely to see coking coal prices decline in December or even before the New Year holiday in January. Most coke firms still need to stock up on the feed coal to avoid any possible supply shortfall approaching the festival,” said a Luliang-based coke producer in Shanxi.
“We plan to restock 200,000 tonnes of coking coal before the festival next month. That’s 7,000 tonnes a day on average,” the source said, adding supply was a bit strained.
An online auction of low-sulfur primary coking coal (S 0.65%, A 9.5%, G 90) at a local mine in Luliang was started at 2,440 yuan/t, unchanged from December 9 and concluded at 2,510-2,515 yuan/t, up 60-65 yuan/t.
One Changzhi-based miner in Shanxi put 10,000 tonnes of low-sulfur lean coking coal (S 0.5%, G 65-75) for auction on December 15, with the starting price of 2,400 yuan/t, ex-washing plant with VAT and in cash. The trade was fully concluded at prices ranging from 2,575-2,580 yuan/t, rising 55-65 yuan/t from December 8 and bringing the total increase to 410-420 yuan/t from a low in November.
An auction of 10,000 tonnes of 1/3 coking coal (S 0.5%, A 10.5%, G 90) in Linfen of Shanxi was started at 2,240 yuan/t and concluded at 2,380-2,385 yuan/t, up 90 yuan/t from December 8 and rising 330 yuan/t from around mid-November.
On the same day, one large miner in Inner Mongolia put low-sulfur fat coal (S 0.8%, A 12%) for auction, which was started at 1,900 yuan/t and concluded at 2,020 yuan/t, rising 120 yuan/t from December 6.
However, there were also a few failed auctions heard due to high starting prices. One miner in Luliang put 3,000 tonnes of coking coal (S 1.3%, A 9.5%, G75) at a comparatively high level of 2,450 yuan/t and no buyers bid for it.
Imported raw Mongolian #5 coking coal prices stabilized at around 1,600 yuan/t, ex-stock Ganqimaodu with VAT and in cash.
On December 14, Ganqimaodu, the largest inland road border port in China, let in 845 trucks loaded with Mongolian coal, bringing the average daily inflows to 823 trucks, higher than 769 trucks in November, Sxcoal’s tracking data showed.
In the downstream sector, coke firms have yet to propose further price hike after the third increase, but steel mills’ buying strength remained good.
“As long as mills maintain current production levels, coke prices are still likely to rise backed by mills’ replenishment demand and rising coking coal prices,” said one Hebei-based trader.
However, some concerns arose as one leading steel firm in Shandong is heard cutting production with shrinking daily coke consumption and marginal increase ofg coke inventories.
“Unstable steel product prices and sales continue to bring uncertainty to the market, so some coke traders moved to the sidelines again,” said one Shandong-based coke producer source.
The near-term price trend would remain to be seen by joint reference of coking coal prices, steel prices and finished steel demand.
Note: This article has been exchanged under the article exchange agreement between CoalMint and Sxcoal.
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