China’s coking coal prices presented a mixed trend on March 22, with some high-priced low-sulfur primary coking coal seeing downward revisions while some price-competitive grades logging mild increases.
On March 22, Fenwei CCI index for Shanxi low-sulfur primary coking coal stood at 3,275 yuan/t, ex-washplant with VAT, down 60 yuan/t compared with the preceding week; the index for Shanxi high-sulfur primary coking coal was at 2,940 yuan/t, unchanged during the same period.
Offers of some low-sulfur primary coking coal supplies (S 0.5%, G 80-85) in Linfen and Changzhi cities in Shanxi fell 200 yuan/t to 3,200-3,300 yuan/t, ex-washplant with VAT and in cash, Sxcoal learned.
Most auctions of coking coal in Shanxi were concluded at starting levels. An auction of 20,000-tonne 0.5%-sulfur and low-ash primary coking coal was all settled at the starting level of 3,100 yuan/t, and the 5,000-tonne 2.4%-sulfur low-cash washed lean coal auction was concluded at the starting level of 2,000 yuan/t.
Fat coal prices softened in Inner Mongolia. “We will further cut prices today after a 50 yuan/t reduction on March 21, but the decrement has yet to be finalized. A case-by-case method is likely to be adopted for future price negotiation during an uncertain price direction,” said one source with a Wuhai-based mine in Inner Mongolia.
Low-sulfur and low-ash fat coal was offered at 2,600 yuan/t and the 1.8%-sulfur kind at 2,350 yuan/t on March 21, the source added.
One auction of fat coal (S 0.8%, A 12%) in Qipanjing in Inner Mongolia was concluded at 2,460 yuan/t, ex-washplant with VAT, down 140 yuan/t compared with the preceding settlement, and high-sulfur fat coal (S 2.4%, A 12%) was settled at 2,220 yuan/t, down 10 yuan/t from the previous trade.
Local coking plants started to press down coking coal prices as their coke inventories piled up due to road restrictions. “We mainly sell coke locally and to customers in Hebei, but dispatches to the latter are nearly stopped by authorities to restrain the spread of the virus,” said one source from a Wuhai-based coking plant in Inner Mongolia.
“Offers of coke remain stable outwardly, but since most trades are negotiable, the actual settlement levels are on the drop. This has prompted some coke producers to cut coking coal buy prices to ease the operational burden,” the source added.
Steel mills in Hebei experienced weak intakes of raw materials and weak dispatches of finished products due to the stringent checks or blocks at key entrances. “The pandemic has crippled consumption of steel, and has forced some local mills to restart production suspension or curbs,” said one mill source in Tangshan of Hebei.
The supply and demand fundamentals have been messed up to some extent by the ongoing outbreaks nationwide, leading to mixed price trends at some production areas and consumption areas, Sxcoal observed.
Some participants expected the downward revision for coking coal prices would not be substantial considering stocks held by the downstream users remained at comparatively low levels, and the demand is highly likely to be released concentratedly once this wave of infection comes under control.
Note: This article has been exchanged under the article exchange agreement between CoalMint and Sxcoal.
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