COKING COAL DAILY: PCI prices fall amid thermal coal price drop; participants wait and see

Seaborne low-vol PCI prices in both the fob and cfr markets fell following the drop in thermal coal prices. And China’s National Development & Reform Commission intervention, plus the news that stranded Australian coal was allowed to clear Chinese customs, have put market participants in a wait-and-see mode.

Fastmarkets indices
Premium hard coking coal, cfr Jingtang: $608.12 per tonne, unchanged

Hard coking coal, cfr Jingtang: $544.88 per tonne, down by $23.71 per tonne

Premium hard coking coal, fob DBCT: $404.59 per tonne, down by $0.52 per tonne

Hard coking coal, fob DBCT: $341.34 per tonne, down by $3.25 per tonne

Fastmarkets Weekly PCI indices
PCI low-vol, cfr Jingtang: $307.68 per tonne, down by $12.82 per tonne

PCI low-vol, fob DBCT: $268.09 per tonne, down by $20.23 per tonne

Low-vol PCI prices in both the cfr and fob markets dropped drastically following the drop in thermal coal prices, sources said.

In domestic China, provincial coal enterprises in Shanxi province promised that their offer prices for 5,500 kcal thermal coal will not exceed 1,200 yuan per tonne from October 27.

“The Indonesian thermal coal offer price also fell,” a trading source in Beijing said.

In the cfr market, the premium hard coking coal price was flat, and the hard coking coal price dropped drastically on weak buying interest.

Although several sources in China said that the stranded Australian coal – which had been allowed to clear customs in China yesterday – can put pressure on the North American premium hard coking coal price, some sources in China and Singapore held different views.

A second trading source in Beijing, for example, said that the North American premium hard coking coal price will be stable at $615 per tonne cfr China because the volume of previously bought Australian premium hard coking coal was limited and Chinese steel mills cannot import new Australian coal.

And as winter approaches, and the US-origin coking coal volume becomes tighter, this could lend support to prices, a trading source in Singapore said.

A trading source in Hebei province said it will take time to see the market effects of the limited Australian coal, and most people were taking a wait-and-see approach, partly because the NDRC took measures to tackle high thermal coal prices this week, and domestic coking coal prices may be affected soon.

In the fob market, a 75,000-tonne December-laycan cargo of premium mid-volatility hard coking coal in the HCCA unbranded segment was offered at $407 per tonne fob today, sources said.

Dalian Commodity Exchange
The most-traded January coking coal futures contract closed at 2,268 yuan ($354.48) per tonne on Friday, down by 235 yuan per tonne.

The most-traded January coke contract closed at 2,978 yuan per tonne, down by 223 yuan per tonne.