Singapore (Platts)--20Feb2013/546 am EST/1046 GMT

The Asian seaborne met coal market remained generally calm Wednesday as Chinese participants adopted a wait-and-see attitude, due to comfortable inventories at mills and uncertainty surrounding potential new economic policies at the People's Congress meetings in early March.

Reflecting marginally higher bids, Platts assessed premium low-volatile hard coking coal $0.50/mt higher at $173/mt FOB Australia while second-tier HCCs remained stable at $155/mt FOB. Both prices have seen very little fluctuation since the start of February, typically of no more than $1.50/mt.

Demand from China had yet to come back after the one-week break, as most players were studying the market before making any firm bids, two mining sources said.

"It doesn't seem like the Chinese are back with a vengeance", one Australian mining source said. "Some people are pulling back from the spot market" ahead of the upcoming quarterly contract negotiations, the source added.

Current market conditions were also not conducive for transactions as "offers are too high" and steel mills "cautious about prices," a Hong Kong trader said.

Another miner agreed. He believed no spot deals would be likely to take place this week. "If a deal takes place this week, it won't be a good price for the seller."

But "it doesn't mean that demand has softened if there are no deals," one Chinese trader said.

The source was still confident in selling premium HCCs at $185/mt CFR levels.

A central China based steel mill source said coastal steelmakers might consider $172/mt FOB or $182-186/mt CFR China for Australian top-tier premium low-vols.

Liulin No.4 HCC in north China's Shanxi province remained steady compared with the price before Chinese New Year, at around Yuan 1,350/mt free-on-rail including credit, for premium HCC, with above 70% CSR, 20-24% VM, below 0.6% sulfur and 9.5% ash. It approximate to $184.4/mt CFR Jingtang port, after deducting 2.56% interest rate for six month, adding Yuan 130/mt railway freight to Tangshan, and deducting Yuan 55/mt truck freight to Jingtang port, 17% VAT and Yuan 30/mt port charges.

On second-tier HCCs, sell-side sources including miners and traders generally saw few offers and hence felt confident that 60-63% CSR Rangal coals could achieve around $170/mt CFR China levels.

However, there was again talk of Canadian mid-vol HCC with close to 70% CSR being offered at close to $170/mt CFR, in line with transactions concluded before the holidays, though this could not be fully substantiated.

A Hong Kong trader said that offers of high-CSR Canadian mid-vols at this level would be likely to pressure prices for non-prime HCC from Australia. "Compared to second-tier Australian HCC, most people would likely choose [the Canadian material]."

In India, Australian a 60-65% CSR HCC blend was heard at $160-165/mt FOB Australia, 70,000 mt. Again highlighting the gap between bids and offers, two end-users would indicatively bid at $150-152/mt FOB levels should they need the material. The coal was last heard offered to China at slightly above $170/mt CFR north China before the Lunar New Year holidays.

Also offered in India was Australian semi-hard material with 45-50% CSR and 25-27% VM with low fluidity at $143-145/mt FOB Australia. The volume offered was for 20,000-25,000 mt loading at the end of March. A mill source said he might consider buying at only $130-135/mt FOB.

PCI STILL FIRM

The PCI market remained firm Wednesday with indicative bids and sell-side information supporting current price levels.

A Chinese steel mill and a sell-side trading source said that prices above $160/mt CFR China for South Walker Creek type PCI would not be surprising given continued resilience in demand, though no new deals were heard.

While PCI was reported to be abundantly available at the ports of Rizhao and Jintang, the trader said that most of these coals were of higher volatile matter.

For second-tier PCI, high offers continued to be heard. Australian PCI with 16-17% VM and 12% ash was offered around $155/mt CFR to a steelmaker in east China. Considering the offer to be relatively high, the purchasing manager said he would pay no more than $155/mt CFR China for Australian PCI with around 13% VM and 10-11% ash.

Meanwhile on met coke, an offer for Asian material with 64-65% CSR and 12-12.5% ash was heard at $310/mt CFR east India this week. The highest indicative bid was heard at "a little above $300/mt CFR India," a market source said.

Coke demand was expected to improve in India, the trader said since local coke makers were reducing output and coking coal prices still remained high. End-users might be more open to procure met coke instead of making their own, he explained.

Out of China, prices seemed to remain high, with a 64% CSR, 12.5% ash, 30-90 mm sized coke offered at $320/mt FOB for 50,000 mt loading in March or April.

--Edwin Yeo, edwin_yeo@platts.com

--Helena Sheng, helena_sheng@platts.com

--Julien Hall, julien_hall@platts.com

--Edited by James Leech, james_leech@platts.com

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