COKING COAL DAILY: Prices up in cfr market, stable in fob sector

Seaborne coking coal prices continued to increase in the cfr market on Friday May 7 amid expectations of further tight supply beause of the political tensions between China and Australia, market sources said. The fob market remained largely stable on the day amid soft buying activity.

Fastmarkets indices
Premium hard coking coal, fob DBCT: $111.28 per tonne, down by $0.40 per tonne
Premium hard coking coal, cfr Jingtang: $233.71 per tonne, up by $4.66 per tonne
Hard coking coal, fob DBCT: $103.46 per tonne, down by $0.25 per tonne
Hard coking coal, cfr Jingtang: $213.39 per tonne, up by $2.77 per tonne

There were additional concerns about the future supply of seaborne coking coal cargoes, especially after China announced on May 6 that it was to indefinitely suspend all activities under the framework of the China-Australia Strategic Economic Dialogue, market sources said.

“We hoped to unload the Australia coal cargoes that have been waiting at China’s ports since last October, [but] now there seems to be no hope to get the cargoes unloaded this year, or even next year,” a mill source from south China said.

Another mill source from north China said that current market sentiment was very positive among both traders and end-users.

A Shanghai-based trader said that large steel mills still need material although the offer price was higher than market expectations.

“I believe their steel margins are good because steel prices increased a lot in April. The priority for those mills is to secure raw materials and to continue production,” the same trader said.

Trade sources for North America-origin high-quality coking coal were limited, so mills had no choice but accept the high prices, some market participants said. Some small mills may try to bring in one or two vessels with coking coal from Russia, Indonesia or South America, but the volumes would be small.

No transactions were reported in the fob market on Friday.

In the fob market, market sentiment stayed relatively stable, with transaction prices moving in small ranges over the week.

Most market participants have been watching the India market recently to gain a clearer picture of coking coal demand, while buyers from India were cautious about procurement or had secured June-laycan cargoes early this week.

Dalian Commodity Exchange
The most-traded September coking coal futures contract closed at 1,939.50 yuan ($299.62) per tonne on Friday, up by 27.50 yuan per tonne.

The most-traded September coke contract closed at 2,838.50 yuan per tonne, up by 39.50 yuan per tonne.

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