COKING COAL DAILY: Fob Australia coking coal market strong amid active buying

Seaborne coking coal prices maintained their upward trend in both the cfr and fob markets on Friday August 6, with good buying interest in the latter.

Prices for seaborne pulverized coal injection (PCI) material inched upward in both the cfr and fob markets in the week to August 6, amid continuous supply tightness and necessary restocking demand, market sources said.

Fastmarkets indices
Premium hard coking coal, fob DBCT: $221.15 per tonne, up by $4.36 per tonne
Premium hard coking coal, cfr Jingtang: $329.59 per tonne, up by $1.05 per tonne
Hard coking coal, fob DBCT: $189.41 per tonne, up by $3.00 per tonne
Hard coking coal, cfr Jingtang: $283.61 per tonne, up by $1.29 per tonne

Coking coal market
The fob Australia coking coal market remained strong on Friday, with firm buying interest from Asia, market sources said.

A 75,000-tonne cargo of premium mid-volatility (PMV) hard coking coal was traded at $222 per tonne fob Australia on August 6, with September laycan.

Another brand of PMV was traded at $215 per tonne fob Australia for 75,000 tonnes on August 6, with September laycan, market sources said.

Several market sources said that the price of premium low-volatility (PLV) hard coking coal was usually $1 per tonne lower than the corresponding PMV in the fob Australia spot market. PMV cargoes are mainly preferred outside China for their fluidity content, especially in India, Fastmarkets understands.

Some market sources said that restocking activity among Indian end-users, while they prepare for production after the July-September monsoon season, would continue to support prices in the short term.

In China, seaborne coking coal prices were largely stable on Friday. Offers for both premium hard coking coal (PHCC) and hard coking coal (HCC) cargoes from North America were unchanged at elevated levels although buying interest was weak.

A mill source from east China said that prices for imported coking coal were about 600 yuan ($93) per tonne higher than for domestic long-term cargoes.

“We plan to keep the supply of long-term cargoes from large domestic suppliers and slowly reduce the ratio of imported coking coal consumption to get through in the short term,” the same source said.

Some market sources said that China’s coking coal prices for long-term contracts with large state-owned mills were broadly stable because of the government’s moves to stabilize commodity prices.

“I heard that major coal mines only increased [prices by] 100 yuan per tonne for the quarter-term contacts in July. That is much lower than spot cargoes or imported cargoes,” an industry source from Tangshan said.

Offers for United States-origin HCC were in the range of $285-290 per tonne cfr China on Friday. The demand for seaborne HCC cargoes was lower than for PHCC because of the relatively sufficient supply of the former cargoes, Fastmarkets heard.

PCI market
The seaborne PCI market in China in the week to August 6 increased amid limited tradable resources.

China’s steel mills were procuring on a demand basis, but domestic supply remained tight in the week.

Offers for Russia-origin low-volatility PCI were heard at $180-190 per tonne cfr China during the week, market sources said.

The elevated offers have scaled back speculative buying activity among traders, a trader source from Shanghai told Fastmarkets.

Fastmarkets’ index for PCI, low-vol, cfr Jingtang, was $184.34 per dry metric tonne on August 6, up by $4.70 per tonne from a week earlier.

The fob Australia PCI price was stable in the week but with new buying interest, market sources said. A few end-users from southeast Asia showed interest for Russia-origin PCI because of the shortage of Australian cargoes in the spot market.

“But buyers are still conservative [given] the current high prices,” an international trader source said.

A September-loading Australia PCI cargo was traded at $155 per tonne fob Australia this week, confirmed by several sources on August 6.

Fastmarkets’ index for PCI, low-vol, fob DBCT, was $156.74 per dmt on August 6, up by $0.46 per tonne from last week.

Dalian Commodity Exchange
The most-traded September coking coal futures contract on the DCE closed at 2,374.50 yuan ($367.53) per tonne on August 6, up by 49.00 yuan per tonne day on day.

The most-traded September coke contract closed at 2,980.00 yuan per tonne on August 6, up by 35.50 yuan per tonne day on day.

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