China’s domestic coking plants are chasing quantities of metallurgical coal to buy to ensure smooth operations during the National Day holiday over October 1-8, with total met coal stocks at coking plants reaching a new high since the previous long holiday – the Chinese New Year break in late January. The healthy margin the coke makers are earning now must be the key driver, according to sources.
On September 17, total coking coal stocks at the 230 Chinese independent coking plants under Mysteel’s weekly survey gained by 1% on week or 4.5% on year to 15.1 million tonnes, a new high since late January. These stocks could sustain the makers for 16.3 days of consumption, 0.1 day longer on week and the longest for seven weeks, according to Mysteel’s data.
Besides, total coke output from the 230 plants reached 696,100 tonnes/day also as of September 17, a new high since Mysteel commenced the survey in late December 2017, as reported. As for the profit the makers are earning, the average margin being won currently by a smaller sample of 30 independent plants also stood at a two-month high of Yuan 313.8/tonne ($46.1/t), or notably higher from the Yuan 89.8/t the makers were earning at the same time last year, according to Mysteel’s data.
The active coal procurement was in response to domestic coking plants’ high operating rate, and the sustaining high demand for coke from steel mills, explained a North China’s Shanxi-based industry source.
“Although some coal miners have raised offer prices for coal recently, it has not cooled the buying enthusiasm of end-users,” he commented. “Even among coking plants in Shandong, the producers have lifted throughput in their coking batteries as high as they are allowed, given the provincial authorities’ order to cap the province’s coke output this year,” he observed.
A coal miner source in Shanxi confirmed, “recently, our met coal sales have risen moderately, which I assume may be supported by steelmakers’ and coking plants’ pre-holiday replenishment.”
However, his company has not raised selling prices for its major coal products. “We have kept our prices stable as most of our products are delivered to long-term contracted customers,” he explained, adding that whether the company will raise prices in October remained unclear.
As of September 22, Mysteel’s national composite coking coal price had edged up by Yuan 1.8/t on week to Yuan 978.2/t and including the 13% VAT.
Supported by the rising domestic demand, China’s prices for imported met coal have increased too. As of September 22, Mysteel’s price for Australian premium coking coal with 10.5% ash, 21% volatile matter and 0.6% sulphur at Jingtang port in North China’s Hebei had firmed by Yuan 20/t on week to Yuan 1,400/t including the 13% VAT.
As of the same day, the price for 11% ash, 25% volatile matter and 0.7% sulphur Mongolian coal hit a two-month high of Yuan 1,000/t also including the 13% VAT, staying unchanged after increasing by Yuan 10/t on day on September 10, according to Mysteel’s data.
Written by Sean Xie, firstname.lastname@example.org
Edited by Russ McCulloch, email@example.com