Coking coal trading thin, interest picks up in Asian seaborne market

Buyers in the Asian seaborne metallurgical coal spot market made more price enquiries on Monday July 7 but trading activity remained relatively thin, sources told Steel First.

Paragraph entered by Atlantic migration, in order for SteelFirst articles to display correctly on Metal Bulletin.

Steel First’s premium hard coking coal index for material sold on a cfr Jingtang basis was calculated at $119.77 per tonne, up by $0.11 on the day. The cfr Jingtang hard coking coal index went up by $0.41 to $105.36 per tonne.

The fob Australia premium hard coking coal index went up by $1.18 to stand at $114.06 per tonne while the hard coking coal number was up by $1.50 to $100.48 per tonne.

“Real buying interest is still weak as Chinese domestic materials are cheap. Most customers continue to take a wait-and-see approach,” a sell-side trading source said.

While the premium segment of the market saw two recent deals concluded at $121-122 per tonne cfr China, the bid/offer gap for second-tier materials remained about $3-4 per tonne.

On July 4, main Chinese ports were holding a total of 11.19 million tonnes of coking coal, up from 11.16 million tonnes a week earlier. Jingtang port saw its inventory rise from 4.5 million tonnes on the last Friday of June to 4.62 million tonnes on Friday last week.

Elsewhere in Asia, Indian buyers have been relatively inactive due to the continuing monsoon season affecting the South Asian country, while Japanese customers were expected to see more movement in the next couple of months, market participants said.

Overall steel demand in Japan in July-September was projected to hit 24.25 million tonnes while crude steel output was expected to total 27.96 million tonnes, up 1.8% and 0.1% respectively quarter-on-quarter, according to the latest estimate from the country’s ministry of economy, trade and industry.

On the Dalian Commodity Exchange, the most-traded September coking coal futures contract closed at 783 yuan ($126.68) per tonne on Monday, down from last Friday’s close of 787 yuan ($127.33) per tonne.

The most-traded September coke contract closed at 1,115 yuan ($180.40) per tonne, up slightly from Friday’s close of 1,114 yuan ($180.24) per tonne.

The yuan prices are the equivalent of cfr prices plus 17% VAT and port charges of about 35 yuan ($6) per tonne.