Heavy snowfall has crippled coking coal and coke shipments across a large swath of northern China, not least Shanxi and Hebei, by prompting road closures and suspension of train services.

 

On December 13, weather officials activated the second-highest level of emergency response against the cold wave and blizzards. In Shanxi, where snowfall occurred twice in a week, accumulated precipitations reached 14-25 millimeters.

 

The blizzard on December 14 has caused full closures of some high-speed roads in Shanxi, driving lots of logistic companies to suspend operations while waiting for reopening.

 

"There are difficulties for us to book trucks to deliver coke to steel mills as drivers shun away operations in current weather conditions, and I heard coke inventories at most mills declined accordingly, rendering them more active in purchases," said one coke producer based in Hebei.

 

The coke inventories held by Sxcoal-surveyed steel companies continued to fall by another 0.37 day from the previous week to 10.38 days of usage during the week ended on December 14, mainly owing to the snowy weather starting from late last week.

 

Slowed dispatches have resulted in coke stock buildups at coking plants, which is likely to pose a downward impact over prices after transportation resumes. Nevertheless, several main coke firms proposed to further raise coke prices by 100-110 yuan/t from December 15 for the fourth round, after snowfalls in Shanxi and Hebei pulled up delivery rates and reduced coking coal availability.

 

Sxcoal's tracking data showed coking coal stocks held by the surveyed coking plants slightly dipped by 0.21 day to 7.56 days of usage.

 

Coking coal stocks at mines also increased on the snowfall impacts. Washed coking coal stocks at surveyed mines increased by 29,200 tonnes to 1.31 million tonnes this week, while raw coal stocks gained by 60,000 tonnes to 1.79 million tonnes.

 

"Feed coal stocks are hard to find their way out and even coking plants ramp up purchases following the third round of price hike, coking coal prices are unlikely to increase further," said one major coke producer in Shanxi.

 

Coking coal prices have presented diverged trends over backbone and blending grades.

 

Sxcoal understood trade prices of low-sulfur primary coking coal in Shanxi have increased to around 2,600 yuan/t, and some offers even climbed to 2,700 yuan/t, although no trades were concluded at such price level.

 

On December 14, the CCI indexes for Shanxi low-sulfur and high-sulfur primary coking coal both unchanged day on day at 2,560 yuan/t and 2,323 yuan/t.

 

In addition, coking coal market in Shanxi failed to find more solid supports from the latest accident happened in Luliang that claimed three lives on December 13, indicating that prices are about to touch the upper limit and have the risk of falling.