Chinese met coke prices have started taking a drift starting May. Currently, prices for 64% CSR and the 62% CSR grades are assessed at around USD 327/MT and USD 314/MT FOB China respectively, increased by USD 3/MT and USD 5/MT from the rates that prevailed in the last week (29 Apr – 05 May’19).
Prices are gearing up as there was a sudden increase in Australian premium hard coking coal prices since last week. This was due to the import restrictions imposed on seaborne coking coals at various ports in China since February, which have prolonged the customs clearance process and effectively resulted in a longer discharge time for outbound cargoes. Latest offers for the Premium HCC grade are assessed at around USD 209.25/MT FOB Australia, higher by about USD 3/MT prevailing in the last week (29 Apr-05 May’19).
Buying sentiment remained bullish amid supply tightness. Overall trading activity remained silent but the market sentiment was described as “stable with an upside” by the majority of market participants on the possibility that there will be hold on the coke price increase.
Additionally, few other market participants still expect further increase in met coke prices due to the recent restrictions imposed in Tangshan (in Hebei province) by Chinese government which is supposed to cut steel production by 30%, in actual fact, only 10% has been cut. This has given a ray of hope to Chinese coke traders and they are speculating the second round of price increase later this month.
Market participants also shared that, there were talks between few domestic producers in China about raising prices once again by USD 10-15/MT. However, no buyer acceptance was seen. In the Chinese coke export market, sources mentioned that currently there is a wide gap between buyer expectations and offer levels from sellers for Chinese coke because of which traders are still hesitant to take their positions in the market.
Coke inventory at major Chinese ports is still high. Coke inventory at major Chinese ports was 4.44 MnT as on May 5, 2019, rising 100,000 MT from April 26, 2019, which was 4.34 MnT.
Additionally, Indian met coke import prices have also shown an uptick of around USD 3-5/MT as compared to last month and currently hovering at around USD 341/MT for 64% CSR and the 62% CSR grades prices at around USD 328/MT on CNF India basis.
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