Coking CoalMarket Overview: China's coking coal market...

Coking Coal

Market Overview: China's coking coal market experienced a continueddownward trend last week due to weak demand. Steel and coke producers purchasedcoking coal only as needed, leading to stagnated sales and inventory pressures,which in turn led to sustained price drops.

Supply and Demand: The supply of coking coal increased as some mines resumedoperations, and there was a slight production increase at a few mines. However,weak demand for finished steel during the traditional lull resulted inprolonged coke price cuts. Coking plants prioritized digesting existing feedcoal stocks, maintaining low coal inventories, and made only necessarypurchases.

Inventory: Coking coal stocks at 100 surveyed coking plants couldsustain 6.16 days of usage, a decrease of 0.08 day from the previous week. Rawcoking coal stocks at surveyed mines reached 3.03 million tonnes as of November13, up 3.06% on the week, while washed coal stocks increased by 4.57% from aweek ago to 2.29 million tonnes.

Prices: Coking coal prices trended downwards in most parts ofShanxi. Low-sulfur fat coking coal fell by 50 yuan/t to 1,500 yuan/t, with acumulative reduction of 250 yuan/t since mid-October. Online auctions facedhigh failure rates, especially for high-priced cargoes.

Mongolian Coal: Mongolian coal transactions were sluggish, with pricespersistently moving lower. The prices for Mongolian 5# raw coal under long-termcontracts declined by 30 yuan/t to 1,100-1,110 yuan/t, ex-stock Ganqimaodu withVAT. The daily throughput at Mandula port increased, but downstream buyersmostly held back on purchases, depressing trading activity.

Seaborne Imports: In the seaborne import market, participants adopted await-and-see approach due to flat overseas demand. Australian coal prices werelargely stable with minor adjustments. Australian premium hard coking coaloffers were temporarily at $206/t FOB, or 1,840 yuan/t CFR China with VAT,indicating no pricing advantage over domestic equivalents, leading to cautiousprocurement among Chinese traders.

Met Coke The Chinese metallurgical coke market experienced atemporary stabilization last week but lacked support from costs and demand. Themarket sentiment was dampened by weaker-than-expected reactions following a keygovernment meeting and by Northern China steelmakers’ request for a third roundof price cuts for the material.

Coke production remainedhigh, with capacity utilization at Sxcoal-surveyed coking plants increasingslightly to 82.3% last week. However, environmental inspections led to a slightretreat in regional coke supply.

Steel mills controlled cokearrivals due to reduced molten iron output and squeezed margins from fallingsteel prices, leading to continued stock accumulation at surveyed cokingplants, which climbed for the fourth week to 589,600 tonnes (+ 9.9% WoW).

Source Sxcoal