COKING COAL DAILY: Seaborne premium indices drop slightly amid concerns over China's import restrictions

Seaborne premium hard coking coal prices dropped slightly on Friday June 19 on a transaction of premium mid-volatility hard coking coal material at a lower price, while concerns over China’s import restrictions constrained Chinese demand, putting pressure on seaborne prices.

Fastmarkets indices

Premium hard coking coal, fob DBCT: $109.20 per tonne, down $0.02 per tonne 

Premium hard coking coal, cfr Jingtang: $117.71 per tonne, down $0.48 per tonne

Hard coking coal, fob DBCT: $89.41 per tonne, unchanged

Hard coking coal, cfr Jingtang: $99.51 per tonne, unchanged

A Panamax vessel of premium mid-vol hard coking coal, with late June-early July laycan, was traded at $107 per tonne cfr China on Friday, sources told Fastmarkets. 

A trader source from China said the transaction at $107 per tonne cfr China was a bargain for the buyer, given that recent transactions of premium mid-vol hard coking coal in the fob Australia market stood at around $105 per tonne fob Australia. 

“I don’t know how to assess the price for premium mid-vol hard coking coal now,” the trader told Fastmarkets.

“Our clients, mainly coke producers and coal washeries, are only willing to buy premium mid-vol hard coking coal at around $110 per tonne cfr China,” a trader source based in Australia said. 

The lowest offer for premium mid-vol hard coking coal was at $110 per tonne fob Australia, so there is a considerable gap between offers and prices that downstream buyers from China can accept. Import restrictions for seaborne coal also constrained Chinese buyers from procuring seaborne material. 

Chinese market participants said they were uncertain whether import restrictions for coking coal would tighten further and were finding customs clearance procedures time- and money-consuming. 

Some were positive, saying that restrictions would be relaxed in the latter half of the year, making it easier to import seaborne coking coal, while others said annual import quotas were pre-fixed and would only reduce as the year progresses. Others suggested that policymakers would loosen control to some extent if the pre-fixed import quotas were used up so as not to put domestic steelmakers in a tough position.

Dalian Commodity Exchange

The most-traded September coking coal contract closed at 1,190.50 yuan ($168.22) per tonne on Friday, unchanged.

The most-traded September coke futures contract closed at 1,972 yuan per tonne, up by 18.50 yuan per tonne.







Min Li

min.li@fastmarkets.com

Published

Min Li

June 19, 2020

13:20 GMT

Shanghai