COKING COAL DAILY: PCI prices up slightly amid continuous supply tightness
Seaborne coking coal prices were largely stable on Friday June 25 in both the cfr and fob market following the previous record-high transaction prices over the week, market sources said.
Prices for seaborne pulverized coal injection (PCI) inched up slightly in cfr market in the week to June 25 amid tight supply of both domestic and Russian PCI. The fob market continued to surge up due to the upgoing coking coal market and supply tightness of Australia PCI, market sources told Fastmakets.
Premium hard coking coal, fob DBCT: $184.11 per tonne, up $0.31 per tonne
Premium hard coking coal, cfr Jingtang: $304.14 per tonne, up $0.80 per tonne
Hard coking coal, fob DBCT: $159.92 per tonne, up $2.99 per tonne
Hard coking coal, cfr Jingtang: $265.31. per tonne, up $0.99 per tonne
Coking coal market
China’s coking coal market is in a stalemate amid domestic supply tightness and necessary restocking demand from a few large steel mills.
Some Chinese coke producers and mills were looking for coking coal cargoes urgently because their stocks can only support about one week of production and some coke producers even actively reduced production due to the shortage of raw materials, various market sources said.
A few large steel mills in east China, without support from coal mines and coke producers, therefore, started to procure imported United States-origin high quality coking coal.
One trader source from north China said the previous transaction of $305 per tonne cfr China for US-origin premium low-volatility hard coking coal was a short-lived individual case and it did not reflect the overall market buying level.
“This end-user got used to Australian coking coal and high-quality domestic coal, so they have no choice but to try the new and high-quality imported US-origin coal to sustain production,” the same source said.
A few market sources expect overall domestic supply of coking coal to gradually return after July 2 and July 15.
“Some coal mines have just closed following other unsafe mines, however, they will gradually apply to resume but I still need to keep watch,” an industry source said.
The fob coking coal market was also largely stable on Friday with few offers and bids submitted. The bid for Australia premium low-vol hard coking coal increased to $185 per tonne fob Australia yet no deals were concluded.
Other market participants adopted a wait-and-see attitude and monitored the source of buying interest this week, Fastmarkets heard.
A mill source from east Asia said there is no procurement demand in the spot market.
“We also heard mills in Japan and South Korea are well-stocked and have no buying interest for spot cargoes,” the same source added.
The PCI market in China in the week to June 25 was relatively quiet because there are limited tradable resources from Russia, market sources said.
The offers for Russia low-volatility and high-HGI PCI with high quality were heard at about $170-$175 per tonne cfr China yet no deals were concluded.
Russia mid-volatility PCI was heard traded at about $164-$165 per tonne cfr China in the week to June 25.
A few traders were concerned whether Russia would impose an export tax on coal products after Russia’s economy ministry proposed temporary export duties on ferrous and non-ferrous metals sold outside the Eurasian Economic Union.
“We’ve not heard that from our suppliers but if there’s an added export tax on Russia-origin coal, Chinese buyers would have to seek other replacements at home and in other countries,” a Beijing-based trader said.
Fastmarkets’ index for PCI, low-vol, cfr Jingtang was $172.03 per dry metric tonne on June 25, up by $0.69 per tonne on a weekly basis.
The fob PCI market inched up in the week to June 25 due to the continuous Australia PCI supply tightness and fast-growing coking coal prices, market source said.
“I feel most brands benefit from the rising Australia coking coal prices,” a Singapore-based trader said.
No deals for Australian PCI were reported over the week, however.
Another mill source from Vietnam said Australia PCI prices continue to be supported amid tight supply.
Fastmarkets’ index for PCI, low-vol, fob DBCT was $141.62 per dmt on June 25, up by $1.78 per tonne on a weekly basis.
Dalian Commodity Exchange
The most-traded September coking coal futures contract closed at 2,045 yuan ($315.79) per tonne on June 25, down by 0.50 yuan per tonne day on day.
The most-traded September coke contract closed at 2,827 yuan per tonne on June 25, down by 37 yuan per tonne day on day.
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