Coking coal supply in China’s major production areas continued to decline, as more mines reported production interruptions from the rising Omicron infections among workers, especially in the leading province of Shanxi.
Sxcoal’s tracking data showed on December 22, raw coking coal production of the surveyed mines declined 4.0% week on week to 8.70 million tonnes, hitting a new low in nine weeks.
Washed coking coal production also fell 3.7% week on week to 4.45 million tonnes, notching the second-lowest since January 27, 2022, Sxcoal’s data showed.
Participants expected coking coal production to continue declining in the following week along with the arrival of infection peak.
And regional supply shortfall is likely to keep coking coal prices from further decline, or even moderately shore up some grades at a time when a growing number of online auction failures amid coke firms’ cautious buy stance dent market sentiment.
Coking coal settlement was mixed on 22 December. One online auction of 20,000 t of low-sulfur lean coal (S 0.5%, G 50-60) in Changzhi of Shanxi started at 2,300 yuan/t, ex-washplant with VAT and in cash, and fully concluded with a premium of up to 5 yuan/t.
On the same day, an auction of 3,000 tonnes of mid-sulfur lean coal (S 1.8%, A 9.5%, G 45-50) also in Changzhi failed.
Coke firms shunned purchase of high-priced supplies but still maintained resilient demand for the grades at rational prices. Some mines still saw smooth dispatches backed by continued orders.
Sxcoal’s tracking data showed coking coal inventories held by the surveyed mines declined 7.8% week on week to 2.50 million tonnes on December 22. Shanxi registered a sharp fall of 20%.
Mongolian #5 raw coking coal prices were steady at 1,590-1,600 yuan/t, ex-stock Ganqimaodu with VAT and in cash. Trading activities remained subdued at the largest inland border port.
On December 21, 837 trucks loaded with Mongolian coal passed through the border port, up from 802 trucks in the preceding day, Sxcoal’s data showed.
In the downstream market, coke firms’ proposals for the fourth round of 100-110 yuan/t metallurgical coke price hikes have been accepted by leading steelmakers in Shandong and Hebei, marking the completion of the rise, which brought the total increase to 400-440 yuan/t since late November.
Some participants foresaw a limited likelihood of a further increase in the near term, given weak steelmaking margins and end-user demand.
Note: This article has been exchanged under the article exchange agreement between CoalMint and Sxcoal.
Leave a Reply