COKING COAL DAILY: China’s cfr market strong with active buying

Seaborne coking coal prices increased in the cfr market on Friday July 30 with more buying interest and fewer tradable resources, sources told Fastmarkets. The fob market was broadly stable on the last workday of the week.

Prices for seaborne pulverized coal injection (PCI) rose in the cfr market in the week to July 30 following a strong domestic market. The fob market stayed largely stable during the week and both demand and supply are limited, sources said.
Fastmarkets indices
Premium hard coking coal, fob DBCT: $216.44 per tonne, up $0.40 per tonne
Premium hard coking coal, cfr Jingtang: $325.85 per tonne, up $8.63 per tonne
Hard coking coal, fob DBCT: $183.66 per tonne, up $0.41 per tonne
Hard coking coal, cfr Jingtang: $277.21 per tonne, up $5.01 per tonne
Coking coal market
The seaborne coking coal market continued to be strong on Friday but premium low-volatility (PLV) hard coking coal cargoes offered to China’s market were still limited, sources told Fastmarkets.
“We didn’t get new offers for PLV this week after a previous deal at $315 per tonne cfr China - maybe both sellers and buyers need time to digest the price growth,” a trader source from Hebei said.
A trader source from Xiamen said he is not in a hurry to trade coking coal now because both the domestic and seaborne markets are strong, and he expects to sell at a higher price later.
Another coke producer source from Shanxi said it is unlikely for the seaborne coking coal price to drop in the short term because domestic cargoes from Shanxi have continued to increase in the reported week.
“Some expect the price to break $320 [per tonne cfr China for PLV] sooner or later,” the source added.
A September loaded Canadian PLV was traded at $325 per tonne cfr China late on July 30, with Panamax volume, sources told Fastmarkets.
Other market participants are cautious about prices considering the production curb on China’s coke producers and the production cut for Chinese steel mills for the remainder of 2021.
The fob coking coal market remains largely firm with offers for Australia PLV at $220 per tonne fob Australia. Most market participants held back from activity after a deal of $215.5 per tonne fob Australia on July 28.
A few international traders noted that miners - expect BHP - are active in the spot market, with available tradable resource to offer in the week.
Other sources remained positive after seeing the bids for Australia premium hard coking coal in the Global Coal platform inching up.
PCI market
The seaborne PCI market in China in the week to July 30 surged following the upward trend of domestic cargoes in China, sources said.
Offers for Russia low-volatility PCI are about $180-185 per tonne cfr China, and a few cargoes with lower quality were offered at about $175-180 in the week to July 30 with the expectation of limited tradable resources for Russia. Domestic supply of PCI has been tight recently because main coal railways have been impacted by heavy rains in North China since mid July.
The tender result of PCI in a large steel mill in Tangshan increased by 89 yuan ($14) per tonne compared with the previous week, sources said.
“The increased tender result is a kind of price guidance for domestic cargoes, and it can support the seaborne Russia cargoes too,” an industry source from Beijing said.
Some traders, however, did not show much buying interest for Russia PCI due to the elevated offers.
“It’s difficult to buy in high-quality PCI at a price lower than $180 per tonne and achieve the reselling margins quickly,” a Shanghai-based trader said.
Fastmarkets’ calculation of the index for PCI, low-vol, cfr Jingtang was $179.64 per dry metric tonne on July 30, up by $6.42 per tonne on a weekly basis.
The fob Australia PCI price stayed largely stable in the week to July 30 amid continuous supply tightness expectations and low trading activities, sources said.
Some Indian buyers expected to see a cleaner picture for Australia PCI with August and September laycan after the strong performance in the coking coal spot market.
No deals at a fixed price were reported during the week.
Fastmarkets’ calculation of the index for PCI, low-vol, fob DBCT was $156.28 per dmt on July 30, down by $0.51 per tonne week on week.
Dalian Commodity Exchange
The most-traded September coking coal futures contract closed at 2,317 yuan ($358.33) per tonne on July 30, up by 61 yuan per tonne day on day.
The most-traded September coke contract closed at 2,943 yuan per tonne on July 30, down by 26 yuan per tonne day on day.

Alice Li

alice.li@fastmarkets.com

Published

Alice Li

July 30, 2021

12:11 GMT

Shanghai