China: Coking coal market awaits direction; seaborne imports dip

China's coking coal market lacked clear directions, as a few major miners started to shore up prices citing a huge supply pressure after they were assigned with thermal coal supply tasks for the fourth quarter, at a time when some miners made downward corrections on coking coal to boost sales.

Some major miners are expected to partly shift away from coking coal production to fulfill their thermal coal supply tasks for power generating and heating uses in the fourth quarter starting from October, according to one source with a Changzhi-based leading coal company.

"Offers of raw meagre coal delivered via road will be adjusted up by 60-100 CNY/t and washed coal by 130-180 CNY/t late Sep 30," said the source, adding his new offer of washed meager coal (S 0.5%, G 0-3) will be updated to 1,990-2,030 CNY/t.

Similar price hike news in Shanxi has slightly spurred buying appetite from some traders and downstream users, who foresaw price increases at more mines after the National Day holiday over October 1-7.

However, majority of miners did not make price adjustment till Sep 30. One Linfen-based miner offered high-sulfur fat coal unchanged at 2,300 CNY/t, ex-washplant with VAT, and sales were good.

There were still a few failed auctions heard in Linfen, due to high prices, while a few lowered prices to avoid more abortive sales.

One Gujiao-based miner in TaiCNY of Shanxi cut offer of low-sulfur primary coking coal (S 0.5%, G 85) by 250 CNY/t to 4,150 CNY/t, ex-washplant with VAT and on banker's draft.

On Sep 30, Fenwei CCI Index for Shanxi low-sulfur primary coking coal stood at 4,168 CNY/t, ex-washplant with VAT, down 30 CNY/t from a day earlier, and the index for Shanxi high-sulfur primary coking coal was down 77 CNY/t to 3,221 CNY/t.

Seaborne imports slid; Mongolian inflows gain

Trading activities of seaborne coking coal retreated this week, as traders awaited more clarity on market directions.

Offers of U.S. first-tier coking coal hovered unchanged at around $625/t, and Russian K4 coking coal steady at about $415/t, CFR China, but no deals were heard clinched this week, according to a trader, who expected a much lower settlement price.

The price gap between imported coal and the domestic comparable coal further narrowed as domestic offers eased in mid this week.

On a delivered to Tangshan basis, the price spread of low-sulfur primary coking coal (S 0.5%, G 80-85) produced in Linfen and Changzhi in Shanxi and the comparable U.S. and Canadian coal was assessed at around 49.23 CNY/t, narrowing by 171.97 CNY/t from the preceding week and down significantly from over 790 CNY/t in the preceding month.

China's metallurgical coal imports are predicted to reach 1.45 million tonnes in Sep, showed Kpler's cargo-tracking data on Sep 30. The volume was down by 35.8% from the August level, with the U.S. coal intakes down 56.2%, Russian coal down 16% but Canadian coal up more than 200%, data showed.

Imports from Mongolia are expected to edge up from the August level. During Sep 1-29, about 2,865 coal trucks cleared customs through China's Ganqimaodu border crossing, the largest coal entrance on the border with Mongolia.

The number for the whole month is very likely to exceed the month-ago level, at 2,917 trucks, if the last day in Sep continues the trend of more than 250 daily trucks registered on Sep 27-29.

The fright rate of short-haul transportations from Tsagaan Khad to Ganqimaodu was retreated to 1,950-2,000 CNY/t on Sep 30 from 2,100-2,200 CNY/t at the start of the week after some traders suspended trading due to high logistics costs.

This has been published as per the article exchange agreement between SteelMint and Sxcoal