Weak Chinese data weighs on seaborne coal market sentiment

Sentiment in the Asian seaborne hard coking coal weakened on Thursday February 20 on the release in the morning of disappointing economic data from China.

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HSBC’s flash purchasing managers’ index (PMI) for February stood at 48.3 points, compared with a final reading of 49.5 points in January. It was the lowest level in seven months.

A reading below 50 points indicates a contraction in manufacturing activity.

Steel First’s premium hard coking coal index for material sold on a cfr Jingtang basis was calculated on February 19 at $135.69 per tonne, down by $0.60 from levels seen on Wednesday.

The premium hard coking coal index fob Australia’s DBCT port also fell, dropping by $0.55 to $125.54 per tonne.

The cfr hard coking coal index stood at $124.63 per tonne, up by $0.63 from the previous day. The fob value also climbed, increasing by $1.11, to $114.25 per tonne

“I felt bearish again after the PMI was out this morning. The market is really hard to predict,” a trading source in Singapore told Steel First.

“It’s hard for prices go up, but there seems to be limited room for further falls. Maybe we’ll stay at this current level for some time,” he added.

Most buyers continued to stay on the sidelines, while supply remained ample.

“Buyers are not keen to purchase material. Many of my customers said they would only be back in the market after mid-March,” another trading source in Singapore said.

The most-traded May coking coal futures contract on the Dalian Commodity Exchange closed at 933 yuan ($153) per tonne on Thursday, down from Wednesday’s close of 943 yuan ($154) per tonne.

The most-traded May coke contract on the exchange also closed lower at 1,334 yuan ($218) per tonne, compared with the previous day’s close of 1,346 yuan ($220) per tonne.

Elsewhere, European mill sources were watching prices but did not expect to be in the market until the beginning of March at the earliest.

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