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Seaborne Met Coal Prices Hit All Time High In China

admin-augaf by admin-augaf
August 26, 2021
in Business
Reading Time: 3 mins read
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Seaborne Met Coal Prices Hit All Time High In China

Seaborne Met Coal Prices Hit All Time High In China

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Beijing August 26, 2021: Seaborne metallurgical coal prices hit an all-time high of $410/mt CFR China for premium hard coking coal Aug. 25 as reported by S&P Platts. The previous high was reported at $392.50/mt CFR China on Jan. 20, 2011.

Domestic supply tightness, along with healthy steel demand, have contributed to the rally in the CFR China market, trading sources said. Domestic Chinese coking coal has been in tight supply as mining activities were restricted by the environmental and safety campaigns imposed by local governments across various provinces in the country.


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“We have been trying to recover from the restrictions which were eased by the government and ramped up our coal production amid a rising market, but so far we have only managed to raise the capacity utilization to around 75%,” a major Chinese miner told Platts, adding that other mines across Shanxi province were also running at similar capacity utilization rates.

Platts assessed the CFR China equivalent of Shanxi PLV at $470.55/mt Aug. 25, up $65.24/mt from the week before. The domestic-seaborne price spread stood at $60.55/mt Aug. 25, with the imported material a cheaper option.

“With the import arb standing largely in favor of imports, it provides some huge economic incentives for steel mills to seek import materials, especially with a focus on high CSR, low-sulfur and low-ash materials,” a Chinese trader said.

The bid and offer range indicated Aug. 25 was reportedly between $400-420/mt CFR China for Canadian premium low vol Raven and US low vol Blue Creek 7.


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China’s unofficial import ban on Australian coal in late 2020 has added to the supply tightness, with imports from the US, Canada and Russia being unable to replace the Australian volume and quality. This has been compounded by the closure of the border with Mongolia on Aug. 23. Australia and Mongolia have been China’s top sources of imported coking coal for many years.

A latest trade was observed at Yuan 3,100/mt DDP Tangshan for an Mongolian No.5, sold to an end-user on Aug. 25. Meanwhile, in the seaborne market, a US low-vol Buchanan offer was heard indicated at $390/mt CFR China, for 100,000 mt, with early-October loading.

“The [China/Mongolian] border could be closed for two weeks due to the new COVID-19 cases, and it does not help the current supply tightness in the market,” a domestic trader said.

The benchmark PLV CFR China has been on the uptrend since May, amid a tightening domestic coking coal and coke market and limited spot availability of seaborne materials outside of Australia. Platts assessed the PLV CFR China at $410/mt CFR China, up 78% from the beginning of May.

In addition, the Chinese steel mill margin is estimated at $111/mt for HRC and $62/mt for rebar as of Aug. 24, based on Platts Analytics data.

“Steel mill margins remain robust partially due to the sharp fall in the iron ore prices offsetting the rising met coal prices,” a Tangshan-based steel mill said, adding that “this has provided some much needed cushion from the procurement perspective to the ever rising coal and coke input cost.”

Platts assessed Premium Low-Vol HCC up $20/mt at $410/mt CFR China, while PLV FOB Australia was up $1/mt at $232/mt FOB Australia Aug. 25.

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