China: Weekly coal and coke market highlights

Chinese domestic metallurgical coke prices have remained supported as domestic supply tightness has showed no signs of improvement.

CoalMint assessed the latest price for met coke with 12.5% ash in North China at CNY 2,210/t ($343.87/t), up CNY 20/t ($1.45/t) on the week.

Besides, the Chinese market also witnessed scarce offers for coke imports. Spot coke tonnage offers from traditional major coke suppliers, such as Poland and Japan, were limited. Hence, end-users have no choice but to source higher priced domestic met coke.

CNF China prices for met coke are currently assessed at $310/t (Japan), $305/t (Poland), $295/t (South Korea) and $295/t (Russia).

Strong steel demand raise expectations of further price increases in coke

China-based steelmakers have been obliged to seek alternative coking coal supply, after Australian coal sales to China came under an informal ban, with the country's steel production running at record levels.

As yet, steel mills have accepted six consecutive rounds of price upticks since October, marking a cumulative increase by CNY 300/t of domestic coke prices in China.

Market participants still believe that the domestic coke price has not finished its climb and the next round of price uptick is imminent.

Coking coal price rally sustains on short supply amid firm demand

Acute supply tightness of imported coking coal spot cargoes has underpinned prices for premium grade coals from non-Australian origins. Chinese steel mills, with immediate restocking need, have become obliged to pay a premium for high-quality hard coking coal from countries other than Australia.

China delivered premium low-volatile hard coking coal prices are predicted to increase further amid persistent supply tightness.

China's domestic coking coal market is relatively stable at the moment. Affected by production curbs for environmental protection and mine safety inspections, coupled with robust buying interest from coking plants, the supply of low sulfur coking coals have fallen short keeping its price firm. It is expected that Chinese coking coal price has considerable upside potential in the short term.

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By Aditya Sinha