Asian seaborne coking coal buyers wait for price direction

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“Many customers retreated after the slump in the futures market we saw on Monday,” a trading source told Steel First.

“We were close to concluding a few deals but the customers eventually walked away after the market dropped on Monday,” another trading source said.

Prices across all indices drifted lower on bearish sentiment.

Steel First’s premium hard coking coal index for material sold on a cfr Jingtang basis was calculated on February 26 at $135.50 per tonne, down by $0.46 from levels seen on Tuesday.

The premium hard coking coal index fob Australia’s DBCT port dropped by $2.29 to $122.05 per tonne.

The cfr hard coking coal index stood at $123.54 per tonne, down by $0.57 from the previous day. The fob value fell by $1.22 to $113.29 per tonne.

Market participants speaking to Steel First pegged tradable levels for top Australian brands at $135 per tonne cfr China or slightly above, and low to mid $120s for second-tier hard coking coal.

The most-traded May coking coal futures contract on the Dalian Commodity Exchange (DCE) closed at 920 yuan ($150) per tonne on Wednesday, up from Tuesday’s close of 911 yuan ($149) per tonne.

The most-traded May coke contract on the same exchange closed at 1,283 yuan ($209) per tonne, also up from the previous close of 1,279 yuan ($208) per tonne.

The yuan prices are the equivalent of cfr prices plus 17% VAT and port charges of about 35 yuan ($6).

China imported 5.7 million tonnes of coking coal in January, down from 8.02 million tonnes in December last year, according to data released by Chinese customs on Wednesday.

Anglo-Australian mining major BHP Billiton announced on Wednesday that it planned to replace several second-tier hard coking coals with new brands.

The miner said that Windsor, Woodlands and Iffram coals would no longer be sold into the Chinese market as early as April this year, replacing them with Peak Downs North and Goonyella C.