COKING COAL DAILY: PCI prices in fob, cfr market diverge on different supply
Seaborne premium hard coking coal prices kept largely stable in both the fob and cfr markets on Friday April 23 without visible changes to seaborne supply and demand, market sources said.
Seaborne pulverized coal injection (PCI) prices increased sharply in the cfr market in the week to April 23 due to supply tightness of Russia coal while decreased in the fob market amid more supply options than last months.
Premium hard coking coal, fob DBCT: $113.14 per tonne, down $0.14 per tonne
Premium hard coking coal, cfr Jingtang: $220.94 per tonne, up $0.40 per tonne
Hard coking coal, fob DBCT: $105.62 per tonne, unchanged
Hard coking coal, cfr Jingtang: $200.49 per tonne, unchanged
The elevated transaction prices for north American premium hard coking coal and hard coking coal amid supply tightness held most market participants back although some of them have turned to low-volatility and low-sulphur cargoes from Russia and Indonesia, sources said.
One deal of Indonesian low-vol and low-sulphur coking coal was heard concluded at $185 per tonne fob Indonesia to China this week.
“It’s higher by about $205 per tonne plus the freight to China...than we expected but it may be blended with other domestic materials since there’s not many domestic low-vol and low-sulphur cargoes,” a Shanghai-based trader said.
Other market sources said the uptrend in sea freight has also supported seaborne coking coal cargoes from north America, Russia and Indonesia.
In the fob coking coal market, market sentiment was largely stable over the week with market impressions unchanged on overall sufficient supply and limited demand from ex-China end-users in the spot market, Fastmarkets heard.
End-users from India and Southeast Asia conducted some major trading activity in the spot market due to their operational plans in April, sources said.
A few market participants said the increasing demand from India before the traditional monsoon season over July to September may support Australian coking coal prices at the current level in the short term.
“They started booking cargoes with a June laycan or booked May-laycan and June-laycan cargoes in one deal this week,” an international trader said.
Some sources were concerned about operations and demand for raw materials at Indian steel mills amid an increasing number of Covid-19 cases, while others said mills could still maintain their essential operations.
“Steel demand is slightly weaker now due to the lockdowns in some states but the virus will not affect steel mills’ operations much,” an India-based trader said.
For the PCI market, some buyers in China looked for Russian PCI cargoes with low-vol and a firmed laycan recently, yet there were not many related cargoes being offered this week.
Some Russian coal traders slightly increased their offers to Chinese steel mills due to the rising sea freight and tight tradable resources at Russia’s ports.
A 30,000-tonne cargo of Russia low-vol PCI was traded at about $130 per tonne cfr China in the week, market sources told Fastmarkets on Friday.
Fastmarkets’ index for low-vol PCI, cfr Jingtang was $129 per tonne on April 23, up by $2.48 per tonne on a weekly basis.
In the fob PCI market, the supply of Australian PCI gradually dissipated the impact of the flood in March while more supply options were on offer recently, market sources told Fastmarkets.
Fastmarkets’ index for low-vol PCI, fob DBCT was $107.72 per tonne on April 23, down by $3.21 per tonne on a weekly basis.
Dalian Commodity Exchange
The most-traded September coking coal futures contract closed at 1,744.50 yuan ($268.77) per tonne on Friday, down by 7.50 yuan per tonne.
The most-traded September coke contract closed at 2,591.50 yuan per tonne, down by 13 yuan per tonne.