India: BigMint's coking coal index up $15/t after recent deal on China market recovery

• 35,000 t PHCC cargo booking reported
  
  
• DCE coking coal futures surge post stimulus announcement
  
  

BigMint's newly-launched index for premium hard coking coal (PHCC) was assessed at $215/tonne (t) CNF Paradip, India, as of 30 September 2024. The index rose by $15/t against the previous assessment on 16 September 2024 of $200/t CNF India.

Australian coking coal prices have surged in line with steep recovery in futures seen in China ahead of National week holidays, with the government initiating stimulus measures to boost the economy. China's central bank has announced a plan to reduce the reserve requirement ratio by 50 basis points, aiming to inject around 1 trillion RMB ($142.20 billion) of long-term liquidity into the market.

"Prices have surged considerably, though the increase appears to be more aligned with movements in the futures market rather than in actual physical trades. As most Indian steel mills secure coking coal through long-term contracts, only a handful of buyers, primarily from southern India, are currently active in the spot market for procurement," said a source from an eastern India-based steel mill.

"Given the current price levels of imported coking coal, it remains unviable for merchant coke oven plants to make new bookings. Imported met coke offers to India are currently around $245-250 FoB Indonesia, while domestic met coke prices continue to face downward pressure," commented a source from a western India-based steel mill.

Rationale- BigMint's coking coal index is derived using data points, i.e., trades, offers, and bids. To download the detailed methodology, click here.

• One deal of 35,000t PHCC from Australia was concluded by Indian mill at $211/t CFR India for Oct'24 laycan. The deal was reported so far in this publishing window. Thus, the T1 trade category was accorded 50% weightage.
  
  
• Seven (7) firm offers, bids, and indicative prices were heard. Six (6) were taken for price calculation and given the balance 50% weightage.
  
  

Factors impacting global coking coal prices-

1. Australian coking coal prices surge as traders take position - Australian premium hard coking coal trended up by $15 to $204.75/t FOB on 27 Sept. Prices picked up sharply on strong steel fundamentals following the Chinese stimulus announcement. Market sources highlighted that prices went up as traders were seen taking positions for November loading cargoes expecting strong demand pick up post Chinese holidays

2.Coking coal futures surge - DCE coking coal futures Sept'24 contract settled at RMB 1,493 today as against RMB 1,261 seen on 23 Sept'24.

3. Chinese mills accept 2nd round of price hike: Several Chinese steel manufacturers have agreed to the second round of coke price increase proposed by coke producers earlier this week. This acceptance comes as companies expedite restocking efforts ahead of the holiday season, while also capitalising on the upward trend in finished steel prices. Major steel mills in Hebei, Shandong and Tianjin agreed on an RMB 50/tonne price hike for wet-quenching met coke and RMB 55/t increase for dry-quenching met coke, effective 26 September.