CHINA COKE WRAP: Prices jump on domestic mark-ups, coking coal surge

China’s coke export prices recovered in March and have shot up in April, thanks to domestic market improvements and a recent surge in seaborne coking coal prices.

While deals were reported last month at $265 and $275 per tonne fob China for coke with 65% coke strength after reaction (CSR), trades this month have already been heard at $305-312 per tonne fob.

Mainstream offers are being heard around $320-330 per tonne fob for such materials.

Metal Bulletin’s price assessment for coke cargoes with 65% CSR, 12.50% ash and physical sizes of 30-90mm was $310-330 per tonne fob China on Tuesday April 11, compared with a low of $250-260 per tonne at the beginning of last month.

The gradual price increase in March was largely within participants’ expectations, but what happened this month was more tracking the “unexpected coking coal surge”.

Metal Bulletin’s fob Australia index for premium hard coking coal almost doubled to $299.84 per tonne this week, from $151.91 per tonne on March 31.

This came after Cyclone Debbie hit Australian coal mines and railways, blocking coal shipments for almost the whole month of April and potentially longer.

Seaborne buyers in the Asia-Pacific market, excluding China, have been snapping up coking coal cargoes. Some just looked for coke shipments instead.

Japan was heard to have traded a number of coke cargoes to India last month, given the advantage that they do not have the $25.20 per tonne anti-dumping duty that India imposes on Chinese coke.

However, this has largely stopped in April as they are short of coking coal or coke supplies themselves, according to sources.

Current enquiries for Chinese coke are coming from India, Japan, South Korea, Southeast Asia and Europe, but buying is hesitant when faced by offers that “vary a lot”, according to sources.

“We have the option of supply from Colombia, Poland and Russia, while offers from China are [priced] the highest,” a buyer source in Europe told Metal Bulletin.

The source added that they may only accept a price of $315 per tonne cfr, which is equivalent to about $300 per tonne fob China.

“They may have to come to buy next week if they see China’s domestic coke prices continue to rise,” a Chinese exporter said.

Actually, a major independent Chinese coke producer in Hebei province has been heard to be raising its coke sales prices by 80 yuan ($12) per tonne from Saturday April 15 onward, adding up to a total gain of 260 yuan ($38) per tonne over about a month’s time.

China exported 400,000 tonnes of coke in March, down by 64.3% from a year earlier, a monthly low last seen in 2014, according to the latest preliminary customs data published on April 13.

The data have a time lag behind market trading, so this mainly reflected the dull trading in January-February, under the effects of the Indian duties, the exporter said.

In the first quarter of 2017, exports totalled 2 million tonnes, down by 26.9% year-on-year, according to the data.