- Buyers ramp up purchases, expecting more price upticks
- Two coke producers initiate price hikes of RMB 50-55/t
Mysteel Global: China’s spot coking coal transactions further warmed up on January 12, as favorable market signs encouraged bargain-hunting activities among some end-buyers who expected more price upticks in the near term, Mysteel learned from market sources.
Mysteel’s assessment of the national composite coking coal price increased by Yuan 8.5/tonne ($1.2/t) from the last session to reach Yuan 1,258.6/t including the 13% VAT on Monday, logging the largest daily gain since early November last year.
Mysteel’s survey results found that a total of 29 coking coal deals in North China’s Shanxi province were clinched higher by Yuan 10-104/t on Monday, widening from 8 deals with price rises of Yuan 10-93/t seen last Friday, although still 2 deals registered price cuts of Yuan 4-51/t on the same day.
Specifically, price increases were mainly observed in Lvliang and Changzhi yesterday, with upticks occurring across all major coal varieties in Lvliang and those concentrated on blending grades in Changzhi. Some sources disclosed that in addition to better trading appetite, the improved quality of some blending coal types also contributed to higher offers in Changzhi.
Elsewhere, the offering price for Zichang gas coal in Yan’an city, Northwest China’s Shaanxi province, was adjusted up by Yuan 20/t to Yuan 880/t, EXW with VAT, effective from 20:00 Monday.
A main trigger for the buoyant sentiment was the Yuan 50-55/t hikes initiated by two coke producers in North China’s Inner Mongolia on their met coke sales prices yesterday, effective on Tuesday and Thursday, separately, citing the rising feed coal costs and higher trucking fees due to recent snowfalls in the country’s northern regions.
This marked the first price-hiking attempt by coke producers following four rounds of coke price cuts since last November. Their moves quickly sparked bullish sentiment among market players, stimulating fresh spot coal purchases from some coke producers and traders, Mysteel learned from sources.
The increased buys may indicate that some end-users have kickstarted their coal hoarding activities for the winter, several sources said. For the met coke market, though it remains unclear whether more coke producers will follow suit or not after the latest price hike attempt, the downside pressures for the market will likely ease, they added.
The commodity’s futures performance was strong as well, with the most-traded coking coal contract for May delivery on the Dalian Commodity Exchange climbing 4.21% to close Monday’s daytime trading session at Yuan 1,238/t.
Mysteel’s monitoring data showed that on Monday, a total of 467,700 tonnes of spot coking coal cargoes were successfully sold in the auction market, soaring by 68.2% from the last session, while the failure ratio still hovered low at only 1.1% among the total offered volumes.
Note: This article has been written in accordance with a content exchange agreement between Mysteel Global and BigMint.
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