China’s coking coal market started the week with extended decline on 27 March, as the previous price cuts were still not enough to spur sales.
On 27 March, the CCI Index for Shanxi low-sulfur primary coking coal stood at 2,388 yuan/t, ex-washplant with VAT, down 30 yuan/t from late last week; the index for Shanxi high-sulfur primary coking coal was flat at 2,096 yuan/t.
“Miners had cut prices in the previous week in a bid to boost sales, yet dispatches remain weak at local mines with limited new orders,” said one source with a Linfen-based coal mine in Shanxi.
“Some miners are planning to further cut the price of low-sulfur primary coking coal (S 0.5%, A 80-85) by 50 yuan/t to 2,400 yuan/t, ex-washplant with VAT and in cash, adding to a total decline of 150 yuan/t so far in the month,” the source noted.
A second miner source in Anze of Linfen expected the low-sulfur primary coking coal price to slip to below 2,400 yuan/t amid a lack of buying strength.
Coking coal prices fell even faster in Inner Mongolia, where a fatal accident in February had significantly pulled up local prices.
A 50 yuan/t decline in coking coal prices was heard in Inner Mongolia on March 27, sending the total decline to around 250 yuan/t so far in the month.
High-ash and low-sulfur coal (S 0.8%, A 12%) is currently offered at 1,900 yuan/t and mid-sulfur fat coal (S 1.8%, A 12%) at 1,850 yuan/t, ex-washplant with VAT.
Chinese buyers’ appetite for imported Mongolian coking coal remained tepid. Washing plants in Inner Mongolia were also very cautious in procurement amid a potential downside risk, while buyers in Shanxi and Hebei were also prudent in placing orders.
The main destinations of imported Mongolian coal are Inner Mongolia, Gansu, Hebei, and Shanxi.
Mongolian coal inflows through China’s Ganqimaodu border port stood at 911 trucks on average each day last week. Mongolian #3 washed coking coal prices were 1,800-1,830 yuan/t, and the prevailing prices of #5 raw coal prices were at 1,580-1,620 yuan/t and a few high-quality #3 supplies were 1,630-1,650 yuan/t, ex-stock with VAT.
In the downstream sector, market participants saw growing downside risks from mills’ prudence toward purchases of met coke.
While coke prices were held steady in production areas, offers at Rizhao port in Shandong continued to fall, with around 160 yuan/t decline heard in the preceding week.
“Considering coking coal prices have already fallen in both the futures market and the port-side market, the prices in major production areas are highly likely to move downward soon,” said one Shanxi-based trader, adding mills contacted by him were reluctant to restock.
“Coking plants would have a small say on pricing once large mills jointly request to cut prices,” said one source with a Hebei-based steel company.
Note: This article has been exchanged under the article exchange agreement between CoalMint and SX Coal.
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