- China coking coal sentiment weakens
- Futures slump pressures spot prices
Mysteel Global: China’s spot coking coal market showed resilience on May 12, with prices for some grades edging higher. However, futures prices tumbled during the session, as market concerns over near-term risks deepened amid weak fundamentals.
On Tuesday, Mysteel assessed China’s national composite coking coal price at Yuan 1,363.6/tonne ($200.7/t) including the 13% VAT, up another Yuan 2.5/t from the previous session.
Among the 202,500 tonnes of coking coal cargoes lifted for online auctions yesterday, 192,500 tonnes were sold successfully, marking a still-low failure rate of 4.9%, according to Mysteel’s tracking.
While spot market trading remained relatively smooth, sentiment among participants had begun to cool. Sources reported that downstream buyers were showing greater caution in purchasing coking coal at current prices, with many restocking only small tonnages to sustain their daily operations.
In North China’s Shanxi province, nine miners raised their prices by Yuan 10-50/t yesterday, slowing from the Yuan 4-61/t among 13 miners the previous day, Mysteel’s tracking showed.
Meanwhile, prices for some premium coal types started to falter. In Shanxi’s Lvliang city, for example, Lishi washed low-sulfur primary coking coal (A 11%, S 0.6%, G 88) was traded at Yuan 1,555/t yesterday, EXW with VAT, down Yuan 45/t from the previous session.
The cooling in spot market sentiment came after yesterday’s 4.6% slump in coking coal futures, with the most-traded September contract on the Dalian Commodity Exchange closing the daytime session at Yuan 1,241/t — its lowest since April 17.
According to market sources, some participants flagged risks from elevated coking coal supply, noting that prices could face downward pressure in the near term if the downstream steel market softens as summer heat intensifies.
“More participants have shifted to the sidelines recently. As uncertainty mounts, the uptrend in coking coal prices could begin to slow in the near term, pending clearer signals from downstream markets,” a market observer noted.
Yesterday, the price of Q235 150mm square billet in Tangshan city, North China’s Hebei province, declined by Yuan 20/t on day to Yuan 3,100/t EXW including the 13% VAT, marking its first drop since early April, according to Mysteel’s assessment.
Note: This article has been written in accordance with a content exchange agreement between Mysteel Global and BigMint.
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