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Many Asian buyers are choosing to sit on the sidelines until after the holiday.
Steel First’s premium hard coking coal index for material sold on a cfr Jingtang basis edged down $0.47 to $142.45 per tonne on Tuesday.
Premium hard coking coal index prices fob Australia’s DBCT port dropped $0.38 to $129.97 per tonne.
The price for hard coking coal stood at $130.11 per tonne cfr Jingtang on Tuesday, down $0.22 from Friday. Hard coking coal fob Australia dropped sharply to $117.93, down $2.40 from Monday.
The gap between offers and indicative bids can easily be up to $5 per tonne or more in the current market, sources told Steel First, adding that such gaps are making deals less likely.
“It’s not just buyers, sellers are also taking a wait-and-see approach to the market,” a trading source in Singapore said.
Lower offers and trades heard in the market led sources speaking to Steel First to consider top Australian brands tradable at the low $140s per tonne cfr China and second-tier hard coking coal at just $130 per tonne cfr China.
The most-traded May coking coal contract on the Dalian Commodity Exchange closed at 927 yuan ($152) per tonne on Tuesday, unchanged from Monday’s close.
The most-traded May coke contract on the exchange closed 4 yuan ($1) per tonne lower at 1,342 yuan ($220) per tonne.
Chinese coking coal imports almost doubled in the past year, according to customs data released on Tuesday. The country seeing imports soar by 40.8% compared with 2012, to reach 75.39 million tonnes in 2013.
Australia accounted for the bulk of the shipments, with 30.15 million tonnes of the steelmaking raw material going into China last year, a 116.5% jump from 2012 levels. Mongolia accounted for 15.44 million tonnes, down 19% from a year ago.
China received 11.08 million tonnes of coking coal from Canada in 2013, up 54% year-on-year, and 8.44 million tonnes from Russia, up 75.9% from 2012. The USA exported 6.07 million tonnes to China last year, up 35.4% compared with 2012.
The expectation that seaborne hard coking coal prices will fall further after the Chinese New Year subdued spot market activity on Tuesday January 21, with bearish sentiment helping push down index prices.