- Coking coal buying remains cautious amid resistance to high prices
- Rising mine output raises expectations of easing supply tightness
Caution among Chinese coking coal buyers continued to weigh on the market on September 11, with Mysteel’s benchmark price posting a slight dip from the previous day.
Last Friday, Mysteel Coking Coal Index (MCCI), which tracks coking coal prices nationwide in China, stood at Yuan 2,276.5/tonne ($339.4/t) including the 13% VAT, down Yuan 1/t from Thursday.
Mysteel’s survey showed that some coking plants and steelmakers had slowed their replenishment of coal feed and showed strong resistance to high-priced coal cargoes.
As a result, 42.4% of the listed 141,500 tonnes of coking coal cargoes went unsold in last Friday’s online auctions. Although the failure rate narrowed from Thursday’s 71.4% after rising steadily through the week, it remained high compared with levels recorded in previous weeks.
Amid the softened market sentiment, many coal traders and washeries had lowered their prices to attract buyers. In North China’s Shanxi province, Mysteel recorded price cuts of Yuan 16-347/t for ten coking coal types last Friday.
The largest cut — Yuan 347/t — was recorded in Changzhi city, where raw Wuxiang meagre lean coal (A 28%, S 3.6%, G 15) was priced at Yuan 1,130/t EXW with VAT after the adjustment, mainly reflecting the lower quality of that batch of cargoes, market sources noted.
In Linfen city, the price for washed Anze primary coking coal (A 9.3%, S 0.45%, G 90) also dropped by Yuan 45/t from the previous session to Yuan 2,502/t EXW with VAT, according to Mysteel’s survey.
While pressure mounted on the demand side, some players grew concerned about the possibility of accelerated resumptions at Chinese coking coal mines. According to Mysteel’s survey of 523 coking coal miners across the country, their raw and washed coal output recovered 4.3% and 5.4% on week over September 3-9 to 1.59 million tonnes/day and 661,900 t/d, respectively — both the highest levels in more than two months.
Some players expect China’s coking coal output to resume gradually, believing the critical phase of supply shortages is coming to an end.
Last Sunday, Shanxi authorities also urged state-run energy companies under the provincial government to “accelerate the resumption of work and production while ensuring safety” and to bear their political responsibility for securing stable supply, according to a provincial government statement.
On the Dalian Commodity Exchange, the most-traded coking coal contract for next January delivery closed last Friday’s daytime trading session at Yuan 1,585/t, down 3.4% from Thursday’s settlement price.
Note: The article is published as part of a content sharing agreement between Mysteel Global and BigMint.
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