China’s coking coal market sentiment further improved on June 8, with many online auctions concluded significantly higher by 200-300 yuan/t on average compared with the week-ago levels.
One auction of mid-sulfur primary coking coal (S 1.3%, A 10%, G 73) in Luliang of Shanxi was settled at 2,510-2,520 yuan/t, ex-washplant with VAT and in cash, up by around 350 yuan/t compared with late last month, with a starting level unchanged at 2,160 yuan/t.
The settlement prices exceeded the starting level by more than 350 yuan/t, a higher premium compared with late May when auctions were fetched results mostly at the initial levels, a direct result that is inseparable from a higher buying appetite from traders and coking plants.
Some traders thought the prices have reached a comparatively low level and started bargain-hunting since the start of the week, Sxcoal learned.
Prices of low-sulfur fat coal (S 0.8%, A 12%) and mid-sulfur fat coal (S 1.8%, A 12%) in Wuhai and Qipanjing areas in Inner Mongolia climbed by 100 yuan/t respectively to 2,600 yuan/t and 2,450 yuan/t, ex-washplant with VAT and on banker’s draft, bringing the aggregate of rising to 150 yuan/t and 160 yuan/t since late May.
Mongolian coking coal price uptrend strengthened on higher tender result
The prices of imported Mongolian coking coal extended the rise as an optimism grew along with higher ceiling prices of a tender issued by a large state-run coke firm in Inner Mongolia.
On June 7, the major coke firm asked for 10,000 tonnes of Mongolian raw coal supply with a ceiling price at 2,060 yuan/t, delivered basis with VAT, climbing 180 yuan/t compared with the preceding tender on June 2. The firm’s preceding tender for supply fetched no result, Sxcoal learned.
The inflows of trucks hauling coal from Mongolia to China through Ganqimaodu border crossing retreated to 374 on June 7, down from 395 trucks from the preceding day, partly affected by the fallout of infections detected earlier.
Mongolia’s border crossings reportedly will close to celebrate Naadam Festival starting from July 11.
Concerns arise after coking coal prices increase faster than coke
While coking coal auctions concluded significantly higher, the rise of coke prices is comparatively lower, which provoked worries that the strength in the feed coal market would temporarily ease.
Chinese coke producers proposed to raise coke prices by 100 yuan/t at the start of the week. Some steel mills were heard to have accepted the rise, while some still hesitated to raise prices due to thin profit margins and restrained sales of finished steel products due to unfavorable weather in the southern part of the country.
At least nine provinces were forecast to face heavy downpours during June 7-9, and some rivers in these regions, especially Hunan, Jiangxi, Zhejiang and Guangdong, have already exceeded their flood warning levels, according to the state-run Xinhua News Agency.
Construction steel sales slowed down notably this week due to the flood-hit suspension of consturiction activities in some southern provinces.
Data showed the construction steel transaction in the country hit a new low of 127,000 tonnes, down from an average of 180,900 tonnes in the preceding week and 154,200 tonnes in the preceding month.
Note: This article has been exchanged under the article exchange agreement between CoalMint and Sxcoal.
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