Prices of primary coking coal grades experienced a drop in the seaborne market as international end-users were reluctant to buy the material at high prices amid sufficient overseas supply.

 

A deal was heard concluded following a series of offers on June 21. Some 40,000 tonnes of Australian premium low-vol hard coking coal offered by a Chinese trader were traded at $239/t FOB by a northeast Asian steelmaker, down about $15/t week on week.

 

The settlement price of cargo with July laycan was equivalent to 2,135 yuan/t CFR China with VAT, suggesting its price gap shrinking with Chinese similar-quality coal.

 

The market witnessed multiple offers for Australia-origin primary coal, with at least two offers below or at $240/t for premium low-vol cargoes with a July delivery. The increasing supply of July-loading cargoes contributed to the market pressure and hit late June-loading coal grades.

 

In addition, Indian buyers showed weaker demand for coking coal during the monsoon season.

 

Russian coking coal trades were impacted by the US's further expansion of sanctions against the country's coal miners, including Elga, Coalstar and Coal company Mairykhsky open-pit mine. Earlier SUEK, Mechel and Sibanthracite were placed on the US sanctions register.

 

Sibanthracite and Elga are crucial coking coal-producing hubs in Russia. The sanction dampened local coal production and exports and pushed up Australian PCI coal prices to some extent. The lost volumes of high-quality Russian coal forced downstream users to move to other alternative sources such as Australian coal.

 

"Russian Elga coal is traded well at ports, yet with unsatisfied shipments of other coal types," said a trader from China's Jingtang port.

 

One shipment of Russian PCI coal was heard traded at $151.8/t CFR China North ports on June 21, loading June 26-July 2.

 

In the Chinese imported market, the persistent higher prices of Australian coking coal compared with domestic coal have continued to limit end-user appetites from China. Seaborne coal suppliers need to be more aggressive with their offers to attract Chinese buyers.

 

Nevertheless, the domestic market was fulfilled with cautious sentiment due to overall weaker-than-usual demand from coke and steel firms as a result of the depressed steel market. Despite daily molten iron production gradually rising, some steel mills faced slim profit margins and potential output reductions.

 

At Ganqimaodu border port, Mongolian coking coal transactions languished albeit with increasing offer prices. Spot offers for Mongolian 5# raw coal were 1,300-1,330 yuan/t, while that for Mongolian 3# washed coal stood at 1,500-1,520 yuan/t, ex-stock Ganqimaodu with VAT.

 

One large coke company in Inner Mongolia concluded a tender seeking 10,000 tonnes of Mongolian 5# raw coal (S 0.7%, V 28.5%, GRI 80) at 1,306 yuan/t against the ceiling price of 1,340 yuan/t DDP with VAT. The settlement price was 4 yuan/t lower compared with June 17.