COKING COAL DAILY: PCI price up in fob market on strong coking coal price

Seaborne coking coal prices inched higher in both the fob market on Friday July 2 on bullish sentiment in the fob market, while prices in the cfr market fluctuated slightly.

Prices for seaborne pulverized coal injection (PCI) slipped slightly in the cfr market in the week to July 2 due to weak demand for imported Russian PCI. The fob market rose due to the upward trend in the coking coal market and continuous tightness in the spot market, market sources told Fastmakets.

Fastmarkets indices
Premium hard coking coal, fob DBCT: $200.06 per tonne, up $8.26 per tonne
Premium hard coking coal, cfr Jingtang
: $307.58 per tonne, up $0.99 per tonne
Hard coking coal, fob DBCT: $168.42 per tonne, up $5 per tonne
Hard coking coal, cfr Jingtang
: $265.89 per tonne, down $0.32 per tonne

Coking coal market

The fob coking coal market continued its upward trend on Friday with few offers and bids submitted. Rising prices are largely due to supply tightness from Australia, sources said.

The offer for Australia premium low-vol hard coking coal remained unchanged at $210 per tonne fob Australia while the bids inched higher day on day, market sources said.

A few traders said the bids from some Asian mills increased from $175 to $185 per tonne fob Australia, but they remain lower than offers on the Global Coal platform.

A 750,000-tonne volume of Australia premium low-volatility hard coking coal was heard traded at $198.5 per tonne fob Australia on July 2, with an August laycan.

Market chatter was heard about production activities at Chinese mines this week.

“Some mines closed for the whole of July while others have resumed production but it is uncertain whether they are at at full operational rates or not - we have to wait for a turning point in the next week,” a Hebei-based trader noted.

A Beijing-based trader said some mills and coke producers in north China had not fully resumed production by July 2, creating the weak procurement demand for seaborne coking coal.

PCI market
The PCI market in China in the week to July 2 remained quiet due to weak supply and demand ahead of China’s 100-year celebration for Communist Party on July 1, market sources said.

Offers for Russia low-volatility PCI are about $170 per tonne cfr China yet buying interests from both end-users and traders are limited, sources said.

“There aren’t decent reselling margins [for Russia PCI], so we aren’t very active in buying cargoes,” a Xiamen-based trader source said.

Another trader source from Beijing mentioned a lack of active offers from suppliers or other traders and the difficulty in finding end-users.

“The expectation from end-users is negative; they are waiting for domestic supply to return,” the same source added.

Fastmarkets’ index for PCI, low-vol, cfr Jingtang was $171.64 per dry metric tonne on July 2, down by $0.39 per tonne on a weekly basis.

The fob PCI market climbed up, following trends in the coking coal market, in the week to July 2. There are still limited tradable resources of both PCI and semi-soft in the spot market, market sources said.

“It’s difficult to access PCI or semi-soft cargoes in the spot market because most of them are long-term cargoes,” a Singapore-based trader said.

Another mill source from India said the current PCI price level is relatively high and they are not keen to procure now.

No deals of Australia PCI were reported over the week.

Fastmarkets’ index for PCI, low-vol, fob DBCT was $144.90 per dmt on July 2, up by $3.28 per tonne on a weekly basis.

Dalian Commodity Exchange
The most-traded September coking coal futures contract closed at 1,942.5 yuan ($300.27) per tonne on July 2, up by 32.50 yuan per tonne day on day.

The most-traded September coke contract closed at 2,641 yuan per tonne on July 2, up by 68 yuan per tonne day on day.

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