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News of a bond default in China drove markets down on Friday, pushing Chinese coking coal futures down to their daily limit, and the bearish mood continued to be felt in Monday trading.
Both the coking coal and coke futures contracts on the Dalian Commodity Exchange dropped by another daily limit of 4% on Monday, to close at 821 yuan ($134) per tonne and 1,157 yuan ($189) per tonne respectively.
The yuan prices are the equivalent of cfr prices plus 17% VAT and port charges of about 35 yuan ($6).
Steel First’s premium hard coking coal index for material sold on a cfr Jingtang basis was calculated at $128.19 per tonne on Monday, down by $5.59 from levels seen on Friday.
The premium hard coking coal index fob Australia’s DBCT port was $118.03, down by $4.42 from Friday.
The cfr hard coking coal index stood at $116.92 per tonne, down by $3.97. The fob value was $106.29 per tonne, down by $4.23 from Friday.
Lower Chinese domestic coal prices, tight credit, a sufficiency of supply, and the unexpected February export figures from China were cited as factors affecting market sentiment.
Last week, Shanxi Coking Coal lowered the prices for its products by 30-60 yuan ($5-10) per tonne, while Yanzhou Coal and Shenhua Group both cut their prices by 30 yuan ($5) per tonne.
Chinese exports in February fell by 18.1% from a year earlier, yielding a trade deficit of $23 billion for the month, according to Chinese customs data. January saw a surplus of $32 billion.
The Asian seaborne hard coking coal spot market continued to be plagued by “extremely bearish” sentiment in China on Monday March 10, with most market participants unwilling to make any moves.