COKING COAL DAILY: Premium price continues uptrend in fob market

Seaborne coking coal prices were largely stable in the cfr market after more market participants became cautious in a fluctuating ferrous market while in the fob market, they maintained the uptrend on Friday May 21 due to increased buying interest, market sources told Fastmarkets.

Prices for seaborne pulverized coal injection (PCI) inched down in the cfr market in the week to May 21 amid a fluctuating ferrous market in China but increased in the fob market amid positive market sentiment, sources said.

Fastmarkets indices
Premium hard coking coal, fob DBCT: $139.42 per tonne, up $2.30 per tonne
Premium hard coking coal, cfr Jingtang: $252.30 per tonne, up $0.83 per tonne
Hard coking coal, fob DBCT: $114.21 per tonne, up $0.25 per tonne
Hard coking coal, cfr Jingtang: $223.68 per tonne, up $1.89 per tonne

Coking coal market
Most market participants in the cfr coking coal market were on the sidelines on Friday after a sharp fluctuation in China’s steel and raw materials market over the week.

“There weren’t many offers in the market today because traders are also watching the changing market and being conservative with their offers,” a Shanghai-based trader said.

Another mill source from northeast China said the seaborne coking coal price is under downward pressure after the sharp and fast increases in the last week.

“Tight supply is supporting the coking coal price but it has run up too fast and needs some corrections,” the same mill source said.

A few sources said the coking coal market would continue amid fluctuations in the short term until there is new necessary procurement demand after mills adjusted steel margins.

Some coke plants in north China proposed a 9th round of price increases for metallurgical coke, by another 120 yuan, due to the low stock level and tight raw materials, Fastmarkets heard.

“The coke price increase is short lived if steel prices cannot reverse up…the current steel margins have fallen a lot,” a Tangshan-based steel mill said.

In the fob coking coal market, the highest transaction price in May for both premium low-volatility (PLV) hard coking coal and premium mid-volatility (PLV) hard coking coal on May 20 boosted market sentiment.

The transaction price of both PLV and PMV on May 20 increased by about $25 per tonne fob Australia compared to May 4, Fastmarkets understand.

A few market participants said traders’ speculative trading seemed to have increased this week.

“The transaction prices surged up a bit fast and it may take time for end-users to get used to the level in the next week,” a trader source from India said.

A deal of premium mid-volatility hard coking coal traded at $141 per tonne fob Australia on May 21, with 105,000 tonnes and laycan in June 11-20.

PCI market
For the PCI market in China, market sentiment turned less bullish over the week with offers slipping and weaker buying interest following the overall downward steel and raw materials industry, sources said.

End-users in south China are more actively asking around for PCI cargoes than those in north China, yet the transactions reported are few because the market moved up and down frequently over the week, market sources said.

“I’m waiting for more signals to take cargoes at proper prices and right now the offers from Russian miners are still very high,” a Beijing-based trader said.

The high-quality and low-volatility Russian PCI supply is still very limited, however, which is supporting the relatively high offering level, a Russian PCI agent said.

A deal of Russia mid-vol PCI was concluded at about $160 per tonne cfr Japan later in the week, sources said.

Fastmarkets’ index for PCI, low-vol, cfr Jingtang was $152 per dry metric tonne on May 21, down by $2.12 per tonne on a weekly basis.

The fob PCI market slightly inched up in the week to May 21 on support from a relatively strong thermal coal market and tight supply of Australian PCI, Fastmarkets heard.

“Production volumes [of PCI] have declined a lot since China’s ban on Australian coal, leading to both weak demand and supply in the spot market,” a Beijing-based trader said.

Fastmarkets’ index for PCI, low-vol, fob DBCT was $108.23 per dmtu on May 21, up by $1.01 per tonne on a weekly basis.

Dalian Commodity Exchange
The most-traded September coking coal futures contract closed at 1,701 yuan ($264.21) per tonne on Friday, down by 27.50 yuan per tonne.

The most-traded September coke contract closed at 2,371 yuan per tonne, down by 121.50 yuan per tonne.

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