The near-term outlook for coking coal and coke markets in China showed continued upbeat signs even after coking plants completed the second round of coke price increase.

 

While coke-making profits were improved by the recent two rounds of upbeat revisions, most coking plants were still standing at break-even points, primarily dragged by aggressive increases of feed coal prices, and not many of them lifted production capacity accordingly.

 

The delayed coke dispatches have motivated some low-stocked steelmakers to urge quicker deliveries, lending more bargaining power to coke makers. This persuades many that there will be a third round of hike given current tight coke supply-demand fundamentals.

 

Despite remaining production curbs, coking plants indeed became more receptive to high-priced coal, and their demand for premium coal grades such as primary coking coal strengthened also.

 

"Coking coal sales cooled down slightly following first coke price increase, but we start to receive more inquiries this week and quite many traders call us to book more cargoes. Coal prices may climb higher," noted by one Inner Mongolia-based coking coal company.

 

Not confined to spot purchases, many miner sources contacted by Sxcoal said they now are busy with a large number of pre-sold orders.

 

On November 29, one coking coal miner in Guxian county, Linfen of Shanxi, put 5,000 tonnes of low-sulfur primary coking coal (S 1%, A 11%, GRI 90) on auction at 2,250 yuan/t, and the final price went up to as high as 2,575 yuan/t, up drastically from 2,150-2,155 yuan/t on November 15.

 

Another coal mine accident in Heilongjiang, which killed 11 miners, on November 28, has caused another tremor to the market, and concerns over the escalation of already-stringent safety inspections arose.

 

In addition, China's State Council declared to assist Shanxi in safe mining from late November this year until the end of May 2024, following a string of deadly accidents in the country's top 1 coal-producing province.

 

"Now let's have an eye on how much the impact of the assistance can pose. If there is no more mine incident, I estimate price may slightly move down," said one Shanxi-based coal miner.

 

On November 29, the CCI index for Shanxi low-sulfur primary coking coal gained 30 yuan/t from the day prior to 2,510 yuan/t, ex-washplant with VAT, while mid- and high-sulfur coal index remained unchanged at 2,350 yuan/t and 2,333 yuan/t, respectively.