COKING COAL DAILY: Premium prices mixed in quiet market

Seaborne coking coal prices were mixed on Friday May 28, with the fob market turning quiet but edging up, while mills were in no hurry to procure forward cargoes at high offer prices in the cfr market, sources told Fastmarkets.

Seaborne pulverized coal injection (PCI) prices increased in the cfr market in the week to May 28 amid speculative buying activity in China. They also edged up in the fob market following the the price trend in coking coal.
Fastmarkets indices
Premium hard coking coal, fob DBCT: $152.80 per tonne, up $0.04 per tonne
Premium hard coking coal, cfr Jingtang: $263.46 per tonne, up $1.17 per tonne
Hard coking coal, fob DBCT: $129.95 per tonne, up $14.99 per tonne
Hard coking coal, cfr Jingtang: $226.83 per tonne, down $5.04 per tonne
Coking coal market
In China, the seaborne coking coal resources remained tight and were offered at an elevated level from several traders.
Mills in northeast China have procured North America premium hard coking coal by tender this week at a monthly average index-based price.
“It’s risky for them to take cargoes now at high prices, so they have to use an index for final settlement following the market movement,” a Beijing-based trader said.
Other mills in south China were unwilling to take forward cargoes because the offer levels are much higher than their bids, with some also expecting to see more domestic supplies in the third quarter of 2021.
“Even if you [book] cargoes now, you may only get the cargo [on site] by about September, and I believe we still have time to seek domestic replacements before September,” a mill source from south China said.
In the fob coking coal market, market sentiment turned quiet after previous high transaction levels of $152.11 per tonne fob Australia for premium low-volatility hard coking coal and $154 per tonne for Australia for premium mid-volatility hard coking coal on May 26 and May 27 respectively.
Bids for July-laycan premium hard coking coal nudged up to $150 per tonne fob Australia on May 28, from $149 per tonne fob Australia on May 25.
A few market sources said the main buyers in fob market at the moment are international traders and that most Asian steel mills finished regular replenishment activities in mid-May. Others are hesitant about procurement after seeing the sharp and fast increase in transaction prices.
“The previous transaction price is already surprising - people need time to get used to it,” a Singapore-based trader said.
PCI market
For the PCI market in China, transaction prices increased amid more speculative buying activity by Chinese traders, market sources said.
A deal for Russian low-vol PCI was done at about $156-158 per tonne cfr China this week, while the bid level was about $145 per tonne cfr China, sources told Fastmarkets.
The offer price for Russian PCI (VM<15%) is about $180 per tonne cfr China, they added.
“The price spread between different offers [for PCI] is large and the demand is limited because mills only procure on a demand basis,” a trader source from Beijing said.
Fastmarkets’ index for PCI, low-vol, cfr Jingtang, was $161.58 per dry metric tonne on May 28, up by $9.58 per tonne on a weekly basis.
The fob PCI market slightly increased in the week to May 28 impacted by the fast-growing coking coal, market source said.
No deals reported this week.
Fastmarkets’ index for PCI, low-vol, fob DBCT, was $109.25 per dmt on May 28, up by $1.02 per tonne on a weekly basis.
Dalian Commodity Exchange
The most-traded September coking coal futures contract closed at 1,801 yuan ($282.10) per tonne on Friday, up by 13.50 yuan per tonne.
The most-traded September coke contract closed at 2,430.50 yuan per tonne, up by 12 yuan per tonne.
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Alice Li

alice.li@fastmarkets.com

Published

Alice Li

May 28, 2021

11:08 GMT

Shanghai