- Higher hot metal output stabilises coal prices but market still weak
- Improved trades, potential coke price hikes may support prices
Mysteel Global: Fluctuations continued in China’s coking coal market on 15 April, with price hikes and reductions both observed among miners. Although coal trades have improved marginally, many players expect the market to remain range-bound before any solid support emerges.
On Wednesday, Mysteel assessed China’s national composite coking coal price at RMB 1,326.2/tonne (t) ($194.6/t), including the 13% VAT, down RMB 0.5/t from the previous session after a brief recovery over the previous two days.
Broader price adjustments were recorded among Chinese coal miners alongside a busier online auction market. Yesterday, coking coal cargoes listed for auction almost tripled from 211,000 t on Tuesday to 609,800 t. Among the total, 456,800 t were sold successfully yesterday, marking a failure rate of 25.1%, according to Mysteel’s tracking.
In North China’s Shanxi province, Mysteel tracked price rises of RMB 1-66/t among at least 15 miners, widening from the RMB 10-53/t hikes among five miners the previous day.
Notably, Mysteel’s assessment of Anze low-sulphur washed primary coking coal produced in Linfen city, Shanxi, edged up RMB 10/t to RMB 1,520/t EXW with VAT yesterday, marking its first rise in around three weeks. Though tiny, such a price rebound of the domestic premium coal type was read by many players as a positive sign for the entire market, sources noted.
“Recent improvement in coal trades has reinforced confidence among market players,” said a Shanxi-based analyst. According to Mysteel’s survey of 314 independent coking coal washeries across the country, as of 14 April, their combined washed coking coal inventories had dropped 3% w-o-w to 3.44 million tonnes (mnt), following a 5.4% jump recorded the previous week.
Price reductions among some miners, however, had underscored persistent selling pressures for some coal varieties, persuading some players to adopt a cautious stance. In Shanxi, 12 miners cut their prices for multiple coal types by RMB 2-70/t, Mysteel’s tracking data showed.
“The coking coal market lacks a clear direction for now. While higher output of hot metal among steelmakers had helped stabilise coal prices, the market still lacks firm momentum for significant improvement,” said a market observer.
Some participants expect more support to emerge from a firmer coke market, with many believing that coke producers will win in their prolonged negotiations with steelmakers on met coke price hikes soon.
Rumours spread that a leading steel group in North China’s Hebei province may nod tomorrow to the RMB 50-55/t price hike that coke makers had demanded and raise their payment in tenders to be issued next Monday.
On the Dalian Commodity Exchange, the most-traded coking coal contract for May delivery closed Wednesday’s daytime trading session at RMB 1,083/t, up 1.9% from Tuesday’s settlement price.
Note: This article has been written in accordance with a content exchange agreement between Mysteel Global and BigMint.
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