China coking coal prices nudge up on improving demand

China coking coal prices nudge up on improving demand

Coking coal prices nudged up in some areas over the past week, thanks to improving demand from downstream sectors, but producers remained cautious about the future demand amid market uncertainties. 

On September 22, Fenwei Energy assessed domestic primary coking coal with 9.5% ash, 24% volatility, 85 G-value, 70% CSR and 1% sulfur at 910 yuan/t, VAT inclusive, on a delivered basis to Tangshan, one key steelmaking center in northern Hebei province, up 10 yuan/t from the week-ago and the month-ago level, respectively.

One Shanxi-based coal washing plant said he raised the price for primary coking coal with 9.5% ash and 0.8% sulfur by 10-20 yuan/t on week to 650 yuan/t with VAT, free-on-rail, mainly due to good sales and declining stocks.

Another Shanxi-based coal washing plant said they are producing based on demand, with low stocks.

"Buying interests from the downstream are generally good; coking coal price may move up further, should the demand strength be sustained," one insider with the plant said.

Coking coal prices may rise slightly in some areas, backed by a potential rise in coke prices amid restocking demand from steel mills, said Zhu Ming, an analyst with Fenwei Energy.

Steel mills in Tangshan now have coke stocks only enough to last for seven days of consumption, local sources said.

Besides, billet prices traded in Tangshan rose 70 yuan/t on week to 2,450 yuan/t last week, ex-works, VAT inclusive, which could be supportive to the coking coal market.

Imported primary coking coal with 9.5% ash, 24% volatility, 85 G-value, 68% CSR and 1% sulfur was assessed $117.0/t, CFR Jingtang port, up $1.0/t from a week ago and $2.0/t from the previous month.

Coking coal stocks at Jingtang port stood at 2.5 million tonnes on September 19, up 8.7% from a week ago and almost unchanged from the month-ago level.

Some 500,000 tonnes of imported coal arrived at Jingtang port last week, one trader said.

This however, doesn’t indicate an improvement in the spot market, as most of the arrivals were imports purchased by coke plants or steel mills directly from overseas, rather than from traders, said a Hebei-based coke plant.

A Shandong-based trader said it is very hard to sell first-tier hard coking coal at Jingtang port, and may have to sell at a loss, as they didn’t sell much of a cargo arrived early September.

A Hebei-based coke plant said the cost of using first-tier hard coking coal is too high, and available stocks of second-tier primary coking coal are rather limited at Jingtang port.

Recently, both domestic traders and overseas suppliers raised offer prices by 10-20 yuan/t on low inventories, but the actual trade prices remained largely stable, said one Hebei-based trader.
  

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