China’s coking coal prices remained steady after the three-day holiday, but sales for some grades weakened due to regional loose supply-demand fundamentals.
On September 13, Fenwei CCI index for Shanxi low-sulfur primary coking coal stood at 2,423 yuan/t, and the index for high-sulfur primary coking coal at 1,880 yuan/t, ex-washplant with VAT, both unchanged compared with the pre-holiday levels.
“Sales of high-sulfur fat coal are slow as customers are reluctant to buy amid growing downside expectation,” said one Jinzhong-based miner in Shanxi. The source’s offer of fat coal (S 1.6%, A 10.5% G 95) remained steady at around 2,100 yuan/t, ex-washplant with VAT.
However, some price-competitive supplies still could spur buying interests. A Changzhi-based source offered low-sulfur lean coking coal (S 0.45%, A 9.5%, G 65) unchanged at 2,150-2,200 yuan/t, and revealed sales were not bad as his prices were slightly lower than a major nearby coal mine.
Coking coal sales at major border crossings were inactive. “Prices remain unchanged at the major border port. High-quality Mongolian coking coal is offered at up to 1,480 yuan/t, but inferior coal, which is in larger volume, is at 1,450 yuan/t, ex-stock Ganqimaodu with VAT,” a local trader source told Sxcoal.
“Mongolian coking coal prices are less likely to fall backed by rising costs of short-haul transportation from Tsagaan Khad to Gashuunsukhait, and also unlikely to rise due to weak buying interests from coke firms amid thin margins,” said a second trader source.
“Some coke firms are increasing purchases after the holiday due to low feed coal stocks, which could temporarily support prices, but the buying strength could diminish after they finish restocking, considering there is a limited improvement in coke purchases from steel mills,” said one Linfen-based miner in Shanxi.
Some mills request another cut on coke price
Some steelmakers from Shandong, Hebei and Tianjin reportedly will cut coke prices by 100-110 yuan/t for the second round on around September 15, due to thin margins and weak consumption.
Earlier in late last week, some coke firms in northwestern China had slightly reduced prices to ease inventory pressure, while major coking plants in the top production hub of Shanxi held prices unchanged.
Participants reckoned the request is still likely to materialize after coke stocks accelerated rising for several weeks, while the country’s new policies published last week to support the infrastructure in the fourth quarter need time to translate to the demand for steel.
Note: This article has been exchanged under the article exchange agreement between CoalMint and Sxcoal.
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