Asian hard coking coal prices static on thin trade

Hard coking coal prices into Asia were static on Friday March 14, as buyers remained cautious amid market uncertainty.

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Steel First’s premium hard coking coal index for material sold on a cfr Jingtang basis was calculated at $126.02 per tonne on Friday, down by $0.414 from levels seen on Wednesday.

The premium hard coking coal index fob Australia’s DBCT port was $114.91, unchanged from Thursday.

The cfr hard coking coal index stood at $115.79 per tonne, down by $0.23. The fob value was $104.84 per tonne, unchanged from Thursday.

“Steel mills and coke plants are simply not buying imported coking coal, as domestic coke prices are falling,” a trader in Shanghai said.

“Miners, on the other hand, are reluctant to [reduce] prices, though spot indices of coking coal have dropped. Therefore, there are big gaps between offers and bids,” he added.

Few trades were reported today.

“Due to tightened credit, steel mills are opting to wait for a while before making new bookings,” a steel mill source in Shandong province said.

Many market participants believe coking coal prices still have room for further falls, while a few believe prices are close to bottoming out.

“If prices continue to fall, coking coal should gain some support, as the cost curve of the Australian miners is said to be above $90 per tonne fob,” another trader in Shanghai said.

“There’s speculation that the Chinese government may release some incentives including relaxing credit standards to some extent, which would in turn give some support to the coking coal market,” he added.

The most-traded September coking coal futures contract on the Dalian Commodity Exchange closed at 839 yuan ($137) per tonne on Friday, down from Wednesday’s close of 853 yuan ($139) per tonne.

The most-traded September coke contract closed at 1,209 yuan ($197) per tonne, down from the previous close of 1,226 yuan ($200) per tonne.

The yuan prices are equivalent to cfr prices plus 17% VAT and port charges of about 35 yuan ($6).