China: Weekly coal and coke market highlights

Chinese domestic metallurgical coke prices continue to move upwards, with buyers accepting a ninth round of price uptick this week, bringing the total quarterly uptick to CNY 450/t.

Meanwhile, China's imported met coke prices keep soaring amid persistent supply tightness, whereas China-delivered seaborne coking coal prices also continue rallying on active buying interest despite limited spot availability of non-Australian premium coking coals.

CoalMint assessed the latest price for domestic met coke with 12.5% ash in North China at CNY 2,360/t ($368.83/t), up CNY 40/t ($6.69/t) on the week, with more upticks expected.

CNF China prices for met coke from major origins have increased by approximately $5/t week-on-week and are currently assessed at $325/t (Japan), $320/t (Poland), $310/t (South Korea) and $310/t (Russia).

Domestic met coke and coal prices strengthen on winter stocking needs

The relative tight supply of coke coupled with the continued interference brought by the ongoing de-capacity policy have consistently jostled up coke prices.

But even as higher domestic metallurgical coke and coking coal prices have raised steel production cost in China, steelmakers are still making margins, thus ruling out possible production cut anytime soon.

Coking plants are also active in production with high operating rates and decent profit margins. China's coke output was 40.46 mn t in November, up 0.46 mn t month-on-month and up 1.83 mn t year-on-year, marking the highest output over the past four years.

China's focus on rising costs of steelmaking

Major coal miners, end-users and traders were recently called upon for discussions to formulate workable solutions in order to stabilize coal prices and ensure stable supply during this winter until next spring.

With regard to the Chinese indefinite ban on coal imports from Australia, some industry participants believe that it may be lifted by mid-2021 with China-based steel mills forced to resume purchases due to their reliance on high-quality Australian grades.

Notably, media sources had previously revealed that more than 80 ships carrying Australian coal - worth over $1.1 billion - were stuck off the Chinese coast unable to offload their blacklisted cargo.