Spot metallurgical coal prices were little changed Tuesday as end-users and traders in China sought more positive signals to enter the market amid weaker steel and iron ore demand.
Premium low-vol hard coking coal prices were unchanged at $124.75/mt CFR China. That equated to $112.75/mt FOB Australia netting back with Panamax freight, and $114/mt FOB using a Capesize calculation. The HCC 64 mid-vol index was assessed $0.25/mt lower at $106.25/mt CFR China.
"Mills are waiting for an improvement in steel industry conditions before they will consider buying more imported raw materials," a northeast China steelmaker said.
Moderate end-user restocking will continue at levels competitive with domestic material -- giving rise to rangebound prices in the near term, the mill source said.
Platts assessment for Q235 5.5 mm HRC in Shanghai, which bears a tight correlation to met coal prices, softened for the fourth session, slipping Yuan 20/mt ($3.24/mt) to Yuan 3,240-3,270/mt with 17% VAT.
The decline in steel prices, while steep, had yet to have a clear impact on met coal, traders and end-users said.
A procurement manager at a Chinese mill said he was keeping steel output at full capacity as he was still close to break even, and so had not adapted his procurement behaviour.
But one international trader thought it unlikely met coal could go unscathed if both steel and iron ore prices continued to fall.
In the top-tier coal category, an offer was reported for Australian premium 67-69% CSR and 21-23% VM blended HCC in a Capesize vessel with an end-September laycan at $116/mt CFR China.
The seller was understood to be holding out for above $115/mt CFR China, having rejected a bid at $114/mt CFR.
Outside China, bid indications by end-users in eastern Asia were at $108-111/mt FOB Australia for the most actively-traded straight premium mid-vols.
In the pulverised coal injection (PCI) segment, a transaction was reported concluded Monday at $90/mt FOB for Australian low-vol PCI, 80,000 mt, in a September laycan shipment.
A fresh offer was tabled at around $95/mt CFR China for a 19-22% VM, 9-10.5% ash Australian PCI, in a half-Capesize vessel. One large Chinese end-user expressed willingness to bid for this cargo at $91-92/mt CFR China.
Several older deals were reported Tuesday that were concluded in the past two weeks. They included a few partially confirmed mid-vol PCI deals to India in the $83-85/mt FOB Australia range, both for September laycans, and a fully-verified Russian semi-soft CFR deal to Southeast Asia at the equivalent of $80/mt FOB Russian far eastern port for 40,000 mt loading in September.
CHINA LIFTS SEABORNE COKE
Chinese coke producers, emboldened by a stronger domestic market this week, raised their export offers by a few dollars and left potential seaborne buyers little room for negotiation.
International traders reported the latest offers from large Chinese exporters at $180/mt FOB China for 64/62% CSR, 12.5% ash material, up $3-4/mt since late last week and resulting in tradable values rising to $178-179/mt FOB.
With spot voyage charter rates from Tianjin to one-port discharge Paradip reported at about $18/mt, this equated to about $195/mt CFR India. That was $10/mt higher than a couple of trades concluded about 10 days ago.
"My suppliers are all increasing prices by $5/mt this week," a Chinese trading source said. "This coincides with the restocking season occurring from late-September to October." The source anticipated another possible round of domestic price rises in coming weeks.
A deal was also reported done late last week for 66/65% CSR, 12-12.5% ash and 40-100mm Chinese coke, in a 50,000 mt vessel with September-end laycan, at $200-210/mt CFR Brazil.
Tracking gains on the physical market, the January coke contract on the Dalian Commodity Exchange gained Yuan 11/mt to the last-traded price of Yuan 1,122/mt. The coking coal contract rose Yuan 5/mt to Yuan 804/mt.
