- Prices surge on limited Shanxi mine restarts, strong buying sentiment
- Coke price hikes, restricted Mongolian coal supply strengthen near-term outlook
China’s coking coal market posted sharp gains across major producing regions again on August 24. Miners maintained an aggressive pricing stance, anticipating that recent met coke hikes will provide further upward impetus given persistently tight fundamentals.
On Monday, Mysteel Coking Coal Index (MCCI), which tracks coking coal prices nationwide in China, stood at Yuan 1,972.2/tonne ($293.2/t) including the 13% VAT, up Yuan 32.6/t from the previous session.
The benchmark price advanced amid broad-based gains across major producing centers yesterday. A surprising surge of Yuan 595/t was observed in washed Gujiao primary coking coal (A 10%, S 0.5%, G 86) — extracted in Taiyuan city, North China’s Shanxi province — in yesterday’s auction market compared with its last session on August 10, settling at Yuan 2,480/t EXW including VAT, Mysteel learned.
Besides, raw Wuxiang meagre lean coal (A 28.4%, S 3.6%, G 15) in Shanxi’s Changzhi city gained Yuan 319/t to reach Yuan 1,303/t EXW with VAT. Excluding these two notable spikes, Mysteel logged advances ranging from Yuan 69-176/t for an additional eight coking coal varieties in the province yesterday.
In Yan’an city, Northwest China’s Shaanxi province, a miner raised its price for raw gas coal by Yuan 110/t to Yuan 1,148/t EXW with VAT, Mysteel’s tracking showed.
In Monday’s online auctions, a total of 101,000 tonnes of coking coal cargoes were listed, with 97,000 tonnes sold successfully, marking a failure rate of only 4%, according to the tracking data.
“Sentiment remained positive in the coking coal market yesterday, with players expecting higher metallurgical coke prices would also help underpin the coking coal market,” said a market analyst.
China’s met coke market uptrend accelerated at an unusually rapid pace yesterday. Shortly after the first round of hikes took effect, major producers initiated a second round featuring larger increases of Yuan 100-110/t – which were accepted by some northern steelmakers later that same day, according to market sources.
Supply-side support persists as Shanxi mine restarts lag. A 1.2-million-tonne/year high-sulfur meagre-lean coal mine in Qinyuan county restarted yesterday, its daily raw coal output has halved from the levels prior to stricter safety inspections introduced in late May, mainly for internal needs, sources said.
Including the newly restarted mine, a total of five coking coal mines in Qinyuan have resumed operations as of yesterday, with a combined capacity of 6.9 million t/y, according to Mysteel’s survey. Meanwhile, two other mines in Qinyuan, with a combined capacity of 2.4 million t/y, are also preparing for final inspections by authorities, sources noted.
“Expectations for the coking coal market remained largely bullish, with coal prices expected to sustain their uptrend in the near term,” an analyst noted.
On the Dalian Commodity Exchange, the most-traded coking coal contract of next January delivery closed Monday’s daytime trading session at Yuan 1,584/t, up by 0.8% from last Friday’s settlement price.
In the imported coal market, the price for Mongolian 5# raw primary coking coal (A 18%, S 0.6%, G 80-85) climbed Yuan 100/t on day to reach 1,550/t with VAT, ex-stock North China’s Ganqimaodu — a major border port for Mongolian coal exports to China. “Demand for Mongolian coal remained strong, however slowed clearance volumes recently had limited its availability at border ports, pushing up prices,” said a market analyst.
Tighter environmental checks at Ganqimaodu are forcing reductions in open-air coal stocks, curtailing new arrivals at the border port, according to sources.
Note: This article has been published in accordance with a content exchange agreement between Mysteel Global and BigMint.
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