Downward trend slows in China's coking coal market

2017-11-20 15:36:00 Viewpoint,  Price,  Coking Coal

China's coking coal market saw slowed downward trend last week as coke producers eased their price-beating activities of coking coal prices amid restocking demand.

Coking coal output decreased last week as miners lowered production pace for safety concerns when the end of the year approaches. Raw coal output totaled 3.89 million tonnes at surveyed mines in Shanxi province last week, down 42,800 tonnes week on week.

Stocks also slid at mines, helping alleviate sales pressure for miners and washers. Washed coal stocks stood at 722,500 tonnes at Shanxi's surveyed mines, down 48,000 tonnes from a week ago.

The market, however, had no material changes in the week, as demand for the coking material remained low.

Operating rate averaged 67.01% last week at nationwide surveyed coking plants, compared with 69.81% a week ago.

In Xuzhou, eastern China's Jiangsu province, coke producers were required to cut 70% or so of production. It was confirmed by a local coking plant, which now had suspended purchase for spot coal.

A Luliang-based miner said they didn't receive new orders, and mainly fulfilled former orders for the time being. He said the local mainstream prices of primary coking coal with 2.0% sulfur stood at 950-1,000 yuan/t, ex-washplant basis with VAT.

A washer in Luliang reported they had halted preparation of high-sulfur primary coking coal, given low purchasing price coking plants gave and high cost of raw coking coal. Prices for primary coking coal with 1.3% sulfur were pegged at 1,270-1,280 yuan/t at local area, ex-washplant with VAT.

A source from Shanxi-based coking plant thought the premium coking coal market had fallen to the bottom, a good timing to add some stocks. "We now have eight days of stocks," he said.

On November 17, Fenwei Liulin low-sulfur coking coal index was assessed at 1,460 yuan/t; that of high-sulfur coal at 1,060 yuan/t, both down 40 yuan/t from a week ago.

Price of Lingshi fat coal was assessed at 1,000 yuan/t, flat on the week; while that of 1/3 coking coal from Linfen was assessed at 1,080 yuan/t, tumbling 100 yuan/t from the week prior. Primary coking coal from Anze, Linfen was 20 yuan/t less than the week-ago level to 1,380 yuan/t.

(Writing by Alex Guo   Editing by Tammy Yang)
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