China's PCI coal prices stabilized last week, supported by active buying from steel mills, price increases in coking coal and coke, as well as regional supply constraints.

On April 26, the 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 1,130 yuan/t and 1,119 yuan/t respectively, ex-washplant with VAT, both flat week on week.

Fenwei assessed Yangquan PCI coal (A 10%, V 8, S 0.6%) in Shanxi at 1,238 yuan/t, unchanged from the previous week; the assessment for Jiaozuo PCI coal (A 12%, V 7, S 0.3%) in Henan remained stable at 1,296 yuan/t.

The PCI coal market remained strong last week. PCI coal supply was still curtailed by safety checks and longwall changes in certain producing regions. Steelmakers had vigorous demand as more blast furnaces reopened and the May Day holiday neared. Increasing coking coal and coke prices also bolstered the PCI coal prices.

In the downstream sector, participants resisted high-priced finished steel products after a price rebound in the past two weeks. Finished steel prices were volatile due to factors like rainfall in southern China.

Steel mills have sped up blast furnaces resumption due to steel stock depletion, supportive policy measures like treasury bond issuance, and enhanced profitability. Molten iron output has notably risen.

Data showed the price of Shanghai HRB 400 rebar (20 mm) stood at 3,640 yuan/t on April 26, unchanged from the week-ago level, while Shanghai hot-rolled coil (3.0 mm) fell 40 yuan/t on the week to 3,900 yuan/t. Tangshan Q235 billet price decreased 20 yuan/t week on week to 3,470 yuan/t.

Near-term PCI coal prices are expected to remain stable because of ongoing purchases from steel mills and rising prices in coking coal and coke. Nonetheless, the modest demand for finished steel may pose some downward risks to the steel and PCI coal sectors.