Coking coal index prices stable amid thin trading
The seaborne hard coking coal market remained weak on Wednesday November 27 as buyers remained on the sidelines.
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Steel First’s daily index for premium hard coking coal cfr Jingtang was calculated at $150.63 per tonne, up by $0.69 per tonne from levels seen on Tuesday.
Premium hard coking coal fob DBCT Australia was calculated at $141.93 per tonne, unchanged on the day.
The price for hard coking coal cfr Jingtang stood at $141.30 per tonne on Wednesday, up by $1.10 per tonne from Tuesday.
Hard coking coal fob DBCT stood at $129.88 per tonne, up by $1.63 on the day.
European sources speaking to Steel First echoed the sentiment expressed by Chinese sources earlier in the week, saying that semi-soft and PCI coals were attracting the bulk of interest from buyers as plants were not maximising coke rates and did not need to buy top-quality material.
“It’s a tough market to sell now, as demand is weak. It’s like a pool of dead water,” a trading source in Shanghai told Steel First.
He cited the recent demolition of blast furnaces in Hebei province as a factor affecting market sentiment.
Ten blast furnaces and 16 basic oxygen furnaces in the region were demolished over the weekend, eliminating 6.8 million tpy of steelmaking capacity and 4.56 million tpy of iron-making capacity.
While most of those furnaces had been idled for some time, the exercise showed the Chinese government’s determination to reduce capacity. Some smaller steelworks may be next to be closed, he said.
Several sources speaking to Steel First said that there is still room for prices to fall.
China produced 2.132 million tpd of crude steel in the second ten days of November, compared with 2.144 million tpd in the preceding ten days, according to estimates by the China Iron & Steel Assn (Cisa) released on Wednesday.
The Dalian Commodity Exchange’s May coking coal contract, the market’s most liquid month, closed at 1,107 yuan ($181) per tonne on Wednesday, down from Tuesday’s close of 1,119 yuan ($182) per tonne.
The exchange’s May coke contract closed at 1,612 yuan ($263) per tonne, also down from 1,620 yuan ($264) a day earlier.