- Production rises 1% w-o-w but overall supply remains tight
- Strong demand, higher coke prices sustain coking coal price rally
The 523 Chinese coking coal miners tracked through Mysteel’s nationwide survey saw their washed coal stocks drop to a more than four-year low during the week to 20 August, as active coal trading continued during the survey period amid improved market sentiment, according to the latest survey results.
Washed coal inventories among the 523 sampled coal miners thinned by another 8.5% on week to 1.65 million tonnes (mnt) by 20 August, one of the lowest levels seen since around November 2021, according to Mysteel’s data.
Against the backdrop of frequent mine safety inspections and constrained domestic coal production, tight coal availability had prompted coal buyers to step up their purchases of the raw material this month, resulting in steady declines in miners’ inventories, as reported.
Mysteel’s survey of the 523 coal miners showed that their raw coal output over 13-19 August had increased 1% to average 1.53 million tonnes/day. However, the marginal recovery did little to help ease the protracted supply tightness, with coal traders and end-users such as coking plants and steel mills continuing to scramble for spot coal cargoes during the survey period.
According to Mysteel’s tracking, the combined clearance rate for online coking coal auctions over August 13-19 stood high at 96.3%, despite a dip from the previous period’s 98.7% average. Over 13-19 August, a total of 821,700 t of cargoes were listed, with 791,700 t sold successfully, Mysteel data show.
Coking coal prices also trended higher amid robust trading. By 21 August, the Mysteel Coking Coal Index that tracks coking coal prices nationwide had reached RMB 1,939.6/tonne ($288.6/t) including the 13% VAT, surging by RMB 187.9/t from the previous week.
Market analysts expect China’s coking coal market to maintain its bullishness in the near term, citing potential support from higher metallurgical coke prices.
On 18 August, leading domestic coke producers began pushing steelmakers to accept another RMB 50-55/t hike in met coke procurement prices, as reported. By 21 August, some northern Chinese mills had accepted the proposal, saying they would pay more for their met coke from 24 August deliveries, market sources reported.
Analysts expect leading steelmakers to follow suit, helping the coke producers to realise their first nationwide price hike after three consecutive reductions since 22 July.
Note: This article has been published in accordance with a content exchange agreement between Mysteel Global and BigMint.
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