ASIA COKING COAL: Bids and offers stay apart ahead of Q2 negotiations
Singapore (Platts)--25Feb2013/823 am EST/1323 GMT
Spot coking coal prices in Asia started the week quietly, as a wide gap
between bids and offers stifled spot liquidity, market participants reported.
Several miners acknowledged that they did not want to offer spot while
Chinese demand spot demand was weak, especially before the April-June 2013
quarterly negotiations, which are due to take place in the next two weeks.
On the buy-side, steelmakers and traders in China were reluctant to bid,
citing uncertainty surrounding the government's attitude towards the
real-estate market, and declining coke prices.
"Suddenly everyone become cautious and less active. I don't think a deal
could take place today, unless at very low price," a Beijing-based trader
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"The market doesn't look very good compared to before Chinese New Year,"
one seller said Monday. "The inventories at mills look healthy, and some
[large steelmakers] won't import until late March."
"It's all very quiet," a Brisbane-based miner added. "Everyone's either
not got a lot of coal, or is not offering."
In spite all of this, most Chinese traders believed that the recent
price decline would be short-term, as the country's steel output was
Platts assessed premium low-vol hard coking coal $0.50/mt lower Monday
at $170/mt FOB Australia, and standard-quality HCC unchanged at $154.50/mt
No new deals were heard concluded, and indicative bids and offers
remained far apart, perhaps reflective of a lack of desperation on either
On PCI also, indicative bids received Monday were lower than last
Friday. One Shandong-based trader, for example, would only consider Russian
10% volatile matter and 10% ash at $151-152/mt CFR China, citing lower
expectations for near-term prices.
"Steel mills still have sufficient HCC and PCI," he said, without
needing to buy spot.
For Russian 12% VM and 12% ash coal, the source would see $142-143/mt
CFR China as reasonable.
For semi-hard materials, two buy-side Indian sources and a trader agreed
that Australian 45-50% CSR, mid-vol but low fluidity material could be
tradable at $135-140/mt FOB.
Meanwhile, contract negotiations for the second quarter of 2013 were not
yet underway, market sources in Japan and Australia said. These were expected
to start after an industry event in Hawaii this week.
Price-wise, a Japanese mill source reiterated he was aiming for a
rollover of prices from the $165/mt achieved in Q1 2013, saying that
fundamentals hadn't changed.
Speaking about pricing mechanisms, he said his preference was for the
existing quarterly pricing. Regarding index usage, the mill source said he
didn't have confidence that spot indices could represent supply and demand
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