China’s coking coal prices remained firm as production slowed down due to safety inspections in major production areas following several mine accidents.
On September 23, an accident happened at a state-run coal mine in Ordos of Inner Mongolia, leading to one death. This followed an accident in a Henan-based mine that killed five. Earlier on September 11, Shanxi reported a coal mine accident and then two accidents occurred again during September 19-20.
The frequent accident highlighted the need to further enhance safety inspections while miners strived to boost supply.
Scrutiny has already been tightened regionally after accidents, and there is a growing likelihood that stricter check would be conducted nationwide in the run-up to the National Day holiday in early October and the 20th national party congress on October 16.
This, coupled with the growing pre-holiday replenishment from coke firms, has pushed coking coal prices higher.
On September 26, Fenwei CCI index for Shanxi low-sulfur primary coking coal was at 2,476 yuan/t, rising 13 yuan/t from late last week; the index for Shanxi high-sulfur primary coking coal was at 2,128 yuan/t, up 83 yuan/t from September 23.
On September 25, one Linfen-based miner in Shanxi put up 1,000 tonnes of 1/3 coking coal (S 0.6%, A 10.5%, G 90) for auction with a starting level of 2,250 yuan/t. The deal was fully concluded at 2,320 yuan/t, rising 5 yuan/t from September 21.
One auction of 15,000 tonnes of raw gas coal in a Xinzhou-based miner in Shanxi was started at 1,050 yuan/t and settled at 1,216-1,218 yuan/t, up 86 yuan/t from the average level on September 21.
One Tangshan-based steel mill in Hebei sought anthracitic PCI coal at a ceiling price of 2,050 yuan/t, delivered basis with VAT and in cash, on September 23, rising 200 yuan/t compared with September 18.
Offers of some coking coal grades that can also be used for power generation have climbed by more than 500 yuan/t accumulatively since mid-August.
In the import market, Mongolian coking coal prices were also buoyed amid improved trading enthusiasm.
The prevailing offers of Mongolian #5 raw coking coal stood at around 1,650 yuan/t, ex-stock Ganqimaodu with VAT and in cash, rising by a total of 100-150 yuan/t from the preceding week.
On September 24, 673 trucks loaded with Mongolian coal passed through Ganqimaodu border port, staying at a high level. In the month to September 24, the daily inflows were calculated at 648 trucks, up from 547 trucks in the same period in August, Sxcoal’s tracking data showed.
In the downstream coke market, the first round of coke price hike has yet to be accepted, with major mills mostly staying on the sidelines.
However, as coking coal prices continued rising, coke firms were planning output cut.
A group of coke firms in Shanxi, Shandong, Hebei, Inner Mongolia and other production areas warned of production curbs at a meeting held by the China Coking Industry Association on September 26, as coke firms generally suffered a 100-300 yuan/t loss due to high costs, even though demand from mills was strong.
Note: This article has been exchanged under the article exchange agreement between CoalMint and Sxcoal.
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