Coal news and updates

Despite Beijing’s attempts to curb runaway commodity prices, the prices of key raw materials in China’s vast steel industry are skyrocketing.

 

High-quality coking coal supplied to China exceeded $ 300 per ton for the first time since 2017, rising almost 150% from October. This is because the steelworks continued to scramble and paid far higher prices than their international rivals.

 

Soaring prices underscore the difficulties China faces in trying to cool its commodities market and foreign policy goals, which it has identified as a major risk of economic recovery.

 

Unlike most other commodities, China is relatively self-sufficient in coking coal, with domestic mines supplying about 80 percent of its needs. However, the size of the steel industry means that it still imports about 65 million tonnes of steelmaking raw materials annually.

 

Most of that total came from Australia.Then in October, Beijing put Informal ban on coal imports From the country for a diplomatic line with Canberra over the origin of the coronavirus crisis.

 

Julian Hall, Asia Metals Pricing Director at S & P Global Platts, said:

 

Between January and May of this year, China imported 18.2 tonnes of coking coal from all destinations, down from 31.7 million tonnes in the same period in 2020, according to S & P.

 

At the same time, domestic coking coal production is declining under the pressure of increased safety and environmental inspections before the 100th anniversary of the Communist Party on July 1.

 

Colin Hamilton, an analyst at BMO Capital Markets, said: Mongolia is another major supplier of coking coal to China.

 

So far, there are few signs that Beijing policymakers are focusing on soaring coke coal prices. However, things can change as prices continue to rise.

 

The rise in prices of iron ore, another major steelmaking raw material, has received the most attention. Earlier this week, China’s premier economic planning agency, the National Development and Reform Commission, said Said to investigate “Severe punishment” for “malicious speculation” and fraudulent activity on domestic iron ore trading platforms.

 

China’s coal coke imports have traded more than $ 300 per ton only three other times. The latest was 2017 after the cyclone disrupted Australia’s supply.

 

“Given price trends, it’s not unreasonable for Chinese steelmakers to feel relieved to see the opening of the import market,” Hall said.

 

Analysts said Australia’s import ban was the main reason Chinese steelmakers were paying more coking coal than their international rivals. According to S & P Global Platts, India’s import price, including freight charges, is about $ 205 per ton, while China’s import price is almost $ 100 higher.

 

However, the boycott of Australian supply has benefited North American coking coal producers who have dramatically increased sales to China.

 

In May, we shipped from just 1 ton to 700,000 tons in the same month of the previous year to China. Miners in Indonesia, Colombia and Mozambique are also increasing exports to China.

 

Coking coal defies China bid to keep control of commodity costs Source link Coking coal defies China bid to keep control of commodity costs

 

 

Source : https://californianewstimes.com