Coking coal delivery in Shanxi and Inner Mongolia, two major production hubs in China, significantly slowed down again along with the tightened regional road transportation amid the COVID-19 outbreaks, forcing some coking plants to maintain or deepen production curbs because of supply shortfall.
One large miner in Linfen of Shanxi offered low-sulfur primary coking coal unchanged at 2,300 yuan/t, ex-washplant with VAT. “With growing difficulties in shipping out coking coal due to road transportation restrictions, miners’ offers start to stabilize,” said the producer source.
“Local sales by truck have been stopped due to the virus, and miners have to try to book railway capacity, which has already been tightly occupied by thermal coal demand,” said one source in Xingxian county in Luliang of Shanxi.
Some washing plants in Wuhai of Qipanjing in Inner Mongolia were heard to have cut production due to the disruption of raw coal arrivals. Due to the same reason, washed coking coal supply was tight, and offers remained generally firm.
Sxcoal learned low-sulfur fat coal (S0.8%, A 12%) in Wuhai was offered steady at 1,800-1,850 yuan/t and mid-sulfur fat coal (S1.8%, A 12%) was at 1,750 yuan/t, ex-washplant with VAT.
A similar barrier on road transportation was also reported by a Yan’an-based miner in Shaanxi. Offers of washed gas coal (S0.5%, G 85) were unchanged at 1,800-1850 yuan/t, ex-washplant with VAT.
On November 28, Fenwei CCI index for Shanxi low-sulfur primary coking coal stood at 2,358 yuan/t, unchanged from late last week; and the index for Shanxi high-sulfur primary coking coal was up 28 yuan/t to 2,133 yuan/t, ex-washplant with VAT.
As the supply availability of coking coal declined, some low-stocked coking plants started to cut production while some maintained the previous cuts.
Adding to the supply disruption, the continued coke-making losses due to high coking coal prices also weighed on production enthusiasm. It is expected coke supply would be regionally tightened this week.
A few coking plants in Shanxi and Inner Mongolia proposed to raise coke prices by 100-110 yuan/t for the second round of hike after the previous proposals were accepted last week. A few small local mills with low coke inventories were heard to have accepted the new hike.
However, major coke firms have yet to propose a second price hike, and leading mills have yet to make a response.
On November 28, Fenwei assessed the Luliang Quasi Grade I coke in Shanxi at 2,360 yuan/t, unchanged from late last week but up 100 yuan/t week on week.
Note: This article has been exchanged under the article exchange agreement between CoalMint and Sxcoal.
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