Coal news and updates

Asia-Pacific metallurgical coal see prices unchanged in a quiet market

The Asia-Pacific metallurgical coal market was mostly quiet Monday though positivity could be heard from some sellers who saw some healthy inquiries from traders and end-users.

Platts assessed Premium Low Vol and second-tier hard coking coals steady on the day at $124.50/mt CFR China and $108.25/mt CFR respectively which equates to $108.75/mt FOB Australia and $94.25/mt FOB after deducting $14/mt for Panamax freight.

In the premium segment, there was a trade for prime hard coking coal with above 72% CSR done at $125/mt CFR north China last Friday. This was for a 70,000 mt volume size which is to be shipped on a 160,000/mt Capesize vessel scheduled for early November laycan.

For Australian coals with similar specifications, a northern Chinese trader was offering at $126/mt CFR China. This was for late September laycan.

The 70,000 mt material is to be shipped on a Capesize vessel.

The sell-side source indicated that he would be willing to sell at $125/mt CFR levels though it was tough to find any buyers at such a figure.

Sources felt that the week-long Golden Week holiday to take place in the first week of October could have some implications for the market.

Sellers with late October or even early November laycans may be tempted to pre-sell their cargoes, rather than risk having to hold them until mid-October, while buyers might do some early buying to avoid having to do so during their holidays, one international trader summarized.

This could result in an increase in spot liquidity, though this pattern may have already occurred in recent weeks, with 12 hard coking coal spot cargoes having been transacted in the last month for late-October or November laycans.

With regards to the domestic market, Chinese miners appeared confident that recent measures that restricted coal quality, as well as stimulus stimulus efforts to boost the economy, could spur near-term prices, according to a steelmaker in eastern China.

"We could see import prices shoot up if these official measures coincide with pre-winter restocking by many steelmakers," the mill source said.

Therefore, it was "logical" for some mills to purchase November laycan cargoes in anticipation of a Q4 price uptick, the source added.

Outside of the spot market, conversations turned to the quarterly settlements for October-December, to be negotiated in Tokyo in the next two weeks.

Most sources polled Monday believed a rollover to be the most likely outcome.

"Nothing really suggests it should change," an Australian marketing executive said, also acknowledging that a rise would be very difficult.

Elsewhere in metallurgical coke, China's production rose 1.4% to 39.92 million mt in August when compared to the same period last year. Total output in the first eight months of 2014 dropped 0.3% to 314.29 million mt.

Meanwhile in the paper market, the most widely-traded January 2015 coking coal contract on the Dalian Commodity Exchange rose Yuan 16/mt ($1.63/mt) to Yuan 794/mt.

Meanwhile, the coke contract gained Yuan 17/mt to the last-traded price of Yuan 1,091/mt.

Source: Platts