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| Sluggish trading as Chinese buyers still doubtful |
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| News Source：http://www.jinchemical.com/
; SendDate：2014-8-27 9:54:23 |
The spot Asian metallurgical coal market witnessed a subdued start to the week as trading remained thin across most categories, despite the swelling number of buyer enquiries.
Premium low-vol hard coking coal was unchanged at $124.75/mt CFR China, maintaining a near three-month high. This equates to $112.75/mt FOB Australia netting back with Panamax freight and $113.95/mt FOB using a Capesize calculation.
Meanwhile, the HCC 64 mid-vol index was assessed steady at $106.50/mt CFR China.
International traders polled Monday said they doubted prices would be supported in any significant way by Chinese pre-winter restocking this year.
"There's no such pattern of restocking anymore. If it happens it will be staggered," one said.
Another international trader said he "wouldn't be going long right now," and that he'd seen no signs yet of any attempt to restock ahead of winter.
Looking ahead, he said there was scant hope of a price recovery, pointing out that prices barely moved in recent months despite a berth maintenance at Hay Point, reports of sub-par rail performances and disruptions to some mines.
In the longer term, the first trader predicted that prices would gradually pick up eventually, driven by production cuts, but that this would take time as mines "don't disappear overnight."
LOW INVENTORIES
On the other hand, Chinese buyers appeared to have a healthy appetite for coal, with coal inventories widely described to be currently at very low levels.
"Bids are still very low, but I'm getting more and more phone calls everyday [by buyers] asking for cargo availability," an Australian mining source said, adding that low coal stocks were now the "primary push factor" for stronger trade volumes.
The long-term prospects for the Chinese steel industry could be considered "rosy" -- if authorities are successful in plans to CURB excess supply and exports continue to increase, one Chinese steelmaker SAID.
On top-tier imported material, the highest indicative bids for the most prized Australian coals could be found at around $124-125/mt CFR China. One of these was given by a steelmaker in eastern China, who said end users in coal-short regions would be willing to pay a large premium for straight premium low-vol over mid-vol blends.
In the second-tier HCC segment, an offer was reported made Monday for Australian 61-63% CSR, 21-22% VM and 7-8% ash HCC, 90,000 mt, early September laycan vessel, at $107-108/mt CFR China.
Most market participants agreed that the most recent deals done of $105-105.50/mt CFR China were likely to be repeated around the same levels Monday.
A Canadian HCC with 58-60% CSR and 24-25% VM was also reported put on the market for around $105/mt CFR China, for end-August laycan, 80,000-90,000 mt volume shipment.
Supply remained relatively tight, with less than five above-58% CSR coals being offered in the non-prime HCC category.
In the Pulverised Coal Injection (PCI) category, negotiations were heard to be ongoing for a September cargo of Australian 11-12% VM and 11-12% ash at $93-94/mt CFR China.
In the coke market, an international trader said he wasn't seeing any offers for 64/62% CSR coke any lower than $177/mt FOB north China.
"They're not giving even a $1/mt discount," he said.
The futures market strengthened for a consecutive session as the most widely traded January 2015 coking coal contract on the Dalian Commodity Exchange rose Yuan 4/mt ($0.65/mt) to Yuan 799/mt from Friday. Meanwhile, the January coke contract gained Yuan 8/mt to a last-traded price of Yuan 1,111/mt. |
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