Online coking coal auctions were concluded with mixed trends in China’s major production areas on December 20, suggesting a more cautious buying stance among coke producers as their fourth price hike proposals remained pending.
While there were still lagged price rises heard in the market, a growing number of online auctions were settled at lower prices this week.
On December 20, one Liulin-based miner in Luliang of Shanxi put 5,000 tonnes of mid-sulfur primary coking coal (S 1.1%, A 10%, G 78) for online auction with the starting price at 2,100 yuan/t, down 50 yuan/t from December 16. Trades were concluded at 2,260-2,265 yuan/t, falling 65 yuan/t from the precious settlements on December 16 but still rising by 360 yuan/t from a low in November.
On the same day, an auction of 10,000 tonnes of high-sulfur primary coking coal (S 2.4%, A 9%, G 70) in Luliang was started at 2,050 yuan/t and concluded at 2,055-2,060 yuan/t. The average settlement price was down 55 yuan/t from December 13 but still 220 yuan/t higher compared with that in mid-Nov, Sxcoal learned.
Despite falls compared with the previous settlement, these deals generally concluded with still large premiums compared with their starting levels, and there was no obvious rise in the rate of failed auctions.
The premiums, to some extent, suggested continued buying strength although it might not be as strong as in the previous week.
In Anze, a major high-quality coking coal production base in Linfen of Shanxi, offers were generally steady backed by continued restocking demand from coking plants.
The prices of low-sulfur primary coking coal (S 0.5%, G 80-85) in the area were unchanged at 2,550-2,600 yuan/t, Sxcoal learned from local sources.
In terms of production, coking coal production declined at some mines in Luliang of Shanxi, as the fast-spreading Omicron infections reduced the attendance rate at work.
Although most mines have yet to report similar impact, that’s likely given the rapid increase in people with Omicron symptoms. A moderate increase in prices of some tightly-supplied grades was still likely in the near term, mine sources noted.
In the import market, market talks on the possible removal of ban on Australian coal emerged again after the news of Australian Foreign Minister Penny Wong’s visit to Beijing this week with her counterpart Wang Yi.
Wang will hold a new round of China-Australia diplomatic and strategic dialogue with Wong during her visit, coinciding with the 50th anniversary of diplomatic relations between the two countries, CGTN reported.
Partly affected by the talks, China’s coking coal and coke futures posted deep falls on December 20.
The most-traded coking coal contracts on the Dalian Commodity Exchange closed the daytime session at 1,841.5 yuan/t, slumping 3.51%, and the most-active coke futures on the bourse ended at 2,652 yuan/t, tumbling 4.10%.
In the downstream coke market, an increasing number of coke firms joined in the fourth round of 100-110 yuan/t coke price hike, yet major steelmakers have yet to respond.
Note: This article has been exchanged under the article exchange agreement between CoalMint and Sxcoal.
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