China's PCI coal market remained stable last week amid moderate purchases among steelmakers and traders.

 

On November 23, Fenwei CCI index for Changzhi PCI coal (A 11.5%, V 12, S 0.5%) and Jincheng PCI coal (A 11%, V 10, S 0.5%) was 1,300 yuan/t and 1,287 yuan/t respectively, ex-washplant with VAT, both flat compared to the week-ago levels.

 

Fenwei assessed the Yangquan PCI coal (A 10%, V 8, S 0.6%) in Shanxi at 1,425 yuan/t, unchanged from a week earlier; the assessment for Jiaozuo PCI coal (A 12%, V 7, S 0.3%) in Henan was at 1,491 yuan/t, also unchanged from the previous week.

 

The transactions of PCI coal were inactive last week. Downstream steelmakers maintained rigid purchases and traders mostly adopted a wait-and-see approach. Major coal miners reported stable PCI coal prices due to subpar deliveries from coal-producing areas.

 

On November 22, one Changzhi-based miner in Shanxi put 48,000 tonnes of raw PCI coal (S 0.5%, A 26%, HGI 80) on auction, starting from 975 yuan/t and fully concluded at 978-1,003 yuan/t. The miner's last trade was partly settled at 1,005 yuan/t on November 19.

 

In the downstream sector, steel mills showed great production enthusiasm with improved profit margins, supporting the PCI coal prices.

 

Steel prices increased before went downside late last week. On November 23, the National Development and Reform Commission and two other departments issued a joint statement to strengthen iron ore regulation, which has somewhat cooled down the steel market.

 

Data showed the price of Shanghai HRB 400 rebar (20 mm) stood at 4,060 yuan/t on November 27, down 20 yuan/t from the week-ago level, and Shanghai hot-rolled coil (3.0 mm) rose 10 yuan/t to 4,070 yuan/t. Tangshan Q235 billet price decreased 50 yuan/t from last week to 3,630 yuan/t.

 

The near-term PCI coal prices are likely to be shored up by steel producers' normal operation and the expected realization of the second coke price hike. The storage demand for peak winter period would also provide support to the market.