ASIA COKING COAL: Premium coking coal marginally up in calm market
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
"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
Current market conditions were also not conducive for transactions as
"offers are too high" and steel mills "cautious about prices," a Hong Kong
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
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
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
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
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
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
--Edwin Yeo, firstname.lastname@example.org
--Helena Sheng, email@example.com
--Julien Hall, firstname.lastname@example.org
--Edited by James Leech, email@example.com
Similar stories appear in Steel Markets Daily.
See more information at http://www.platts.com/Products/steelmarketsdaily