COKING COAL DAILY: Seaborne premium coking coal prices largely flat; PCI price up in fob market [CORRECTED]

Seaborne premium hard coking coal prices reversed down in the cfr market and inched higher in the fob market on Friday March 26 amid a positive outlook on the demand side in the fob market, sources said.

The seaborne low-volatility pulverized coal injection price increased in the fob market amid more procurement activity while falling down in the cfr market due to weak demand and sufficient local supply, sources said.

Fastmarkets indices
Premium hard coking coal, fob DBCT: $113.74 per tonne, up $0.97 per tonne
Premium hard coking coal, cfr Jingtang: $212.71 per tonne, down $0.74 per tonne
Hard coking coal, fob DBCT: $105.65 per tonne, up $0.80 per tonne
Hard coking coal, cfr Jingtang: $199.25 per tonne, down $0.23 per tonne

In the cfr China market, overall sentiment on imported premium hard coking coal was pessimistic amid the continuous falling domestic coke price and production curb at steel mills in north China’s Tangshan city.

Coke plants in north China have received a proposal for another domestic price cut of 100 yuan ($15) per tonne this week, which is a decrease of 800 yuan ($122) per tonne since January, while others started to negotiate with end-users to stop price cuts and stabilize market prices.

Some market sources, however, said the supply of both domestic and imported premium hard coking coal is very limited and their prices will be supported at the current level.

“The price spread or cost between premium cargoes from Shanxi and America is very close and some south China mills still have regular replenishment plan for imported cargoes,” a mill source from south China said.

While other market sources may consider the overall cost with mid-sulphur hard coking coal from north China compared to related imported cargoes.

“The primary advantage for current imported hard coking coal is low sulphur content, if their price is higher than the total cost of domestic coking coal and de-sulphur cost, we won’t consider buying imported cargoes,” a mill source from south China said.

In the fob market, most market participants adopted a wait-and-see attitude on the last workday of the week. The bidding level from some buyers in India inched slightly higher after several deals concluded in the fob market over the week.

“We know some Indian mills prefer to buy cargoes by capesize vessels to save the freight cost recently, and they have more buying interest in procurement demand,” a coke plant from India said.

An April 20-29 laycan cargo of 80,000-tonne premium mid-volatility hard coking coal traded at $114.50 per tonne fob Australia on March 24, with the trading value inched higher by $0.50 per tonne than previous day.

For the seaborne low-volatility pulverized coal injection (PCI) market, there are only Russia PCI resources in China’s market, and both the offering and trading level declining since previous week due to the weak demand from Chinese end-users.

“The domestic supply of PCI is sufficient, but demand is dampened due to the production cut in Tangshan from this week,” a Russia low-vol PCI trader said.

Fastmarkets’ index for low-vol PCI, cfr Jingtang was $126.80 per tonne on March 26, down by $1.20 per tonne on a weekly basis.

In the fob PCI market, however, market participants reported increased demand, especially from India, with regular procurement demand.

A mill source from Malaysia, however, said they may consider replenishing when Australia-origin PCI is offered at a lower price than the trading value of $104 per tonne fob Australia in the previous week because sea freight costs are very high for small-size ships and the demand from local mills is also limited.

Fastmarkets’ index for low-vol PCI, fob DBCT was $106.62 per tonne on March 26, up by $3.09 per tonne on a weekly basis.

Dalian Commodity Exchange
The most-traded May coking coal futures contract closed at 1,560 yuan ($238.44) per tonne on Thursday, up by 11 yuan per tonne.

The most-traded May coke contract closed at 2,211.50 yuan per tonne, up by 36 yuan per tonne.

[Editor’s note: This article was updated to amend Fastmarkets’ indices for premium hard coking coal, cfr Jingtang and hard coking coal, fob DBCT, which had appeared incorrectly when this story was initially published.]

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