China's coking coal ticks up as sentiment warms

Mysteel Global: China's coking coal market ticked up again on 19 September, as sentiment among participants warmed after the domestic coke market embraced a long-awaited rebound in more than one month.

On 19 September, the national composite coking coal price under Mysteel's assessment came in at RMB 1,423.1/tonne (t) ($201.4/t), including 13% VAT, marking a notable increase of RMB 6.5/t d-o-d.

The main driver of the market mood was the latest coke price hike of RMB 50-55/t, the first after eight bouts of cuts since late July, which successfully landed across the country as leading steelmakers in North China's Hebei and East China's Shandong gave a nod in the middle of last week, sources shared.

This also cheered up the derivative market for major ferrous commodities in China yesterday, with the most-traded coking coal futures contract for January 2025 delivery on the Dalian Commodity Exchange jumping by 2.71% to settle at RMB 1,914.5/t when closing Thursday's daytime trading session.

Some traders and washeries, eyeing new profitable opportunities, started replenishing their coking coal stocks yesterday, while others still adopted the wait-and-watch approach. Coke and steelmakers with low coal inventories were also seeking new coal cargoes to secure sufficient raw materials ahead of the week-long National Day holiday over 1-7 October, sources said.

Mysteel's tracking data showed that a total of 298,700 t of domestic coking coal were sold through auctions on Thursday, representing 97.1% of the total offered cargoes, up from Wednesday's 88.3%.

In North China's Shanxi province, more coking coal varieties registered daily gains on Thursday, generally in a range of RMB 27-80/t, Mysteel's survey showed. For example, prices of Anze primary coking coal (ash < 9.5%, VM < 20%, sulphur < 0.5%, GRI > 85, Y > 15 mm, MT < 10%, CSR > 68%) in Shanxi's Linfen city rose by RMB 20/t d-o-d to RMB 1,680/t, on exw basis with VAT.

In the seaborne market, Chinese buyers' appetite for Australian forward coal cargoes was still constrained by the large bid-offer spread, while the trading atmosphere for Russian cargoes warmed slightly alongside the improved outlook for the near-term market, Mysteel learned from sources.

For spot imported coal at Chinese ports, traders slightly lifted their offering prices yesterday due to better market sentiment and a rebound in the futures market. However, Chinese steel mills have not bid higher when seeking new imported coking coal cargoes, as their current stockpiles remain sufficient, sources disclosed.

Meanwhile, inquiries for Mongolian coking coal stayed sparse at major Sino-Mongolian border crossings, given Chinese buyers' continued wait-and-watch mood. On 19 September, a large steel mill in Northwest China bought 11,250 t of Mongolian 5# washed primary coking coal (ash 11%, sulphur 0.65%, VM 26-28%, GRI 80, MT 8%, CSR 63%) at RMB 1,476/t DDP basis with VAT, lower by RMB 13/t w-o-w, Mysteel learned.