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China coking coal prices further slide on weak demand

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Publish time: 13th March, 2015      Source: www.cnchemicals.com
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China’s coking coal market has further worsened this week, as producers cut prices in major production bases in Shanxi, Hebei and Shandong provinces amid weak downstream markets.As of March 11, the ex-works price of low-sulphur primary coking coal in Liulin was assessed at 730 yuan/t with VAT, down 10 yuan/t from the week before; Liulin 4# primary coking coal was still offered around 720-740 yuan/t with VAT, ex-works.One Shanxi-based end user confirmed the price of premium washed primary coking coal, or Jiaomei in Chinese Pinyin, was reduced by 20-30 yuan/t in Liulin, one major coking coal base in Shanxi.One Hebei-based buyer said the price of Shanxi’s high-sulphur (2%) washed fat coal, or Feimei in Chinese Pinyin, was 760-770 yuan/t, Tangshan, delivered basis; prices may further decline in late-March.Under the Chinese coal classification standards, both Jiaomei and Feimei are premium coking coals that are used to blend with other coals to produce coke at a lower cost.Another Hebei-based buyer said large miners in Shanxi haven’t finalized price adjustments yet and it was still negotiating with producers about cutting prices.Coal mines in Linfen, another major coking coal base in Shanxi, may not resume production until late-March or even later, local sources said. All the mines, either controlled by the Linfen government or private ones, are yet to restart after the Lunar New Year holidays, mainly impacted by the second round of safety review, the parliamentary sessions, and the recent accident in Yangquan. Provincial-owned mines may start operation in succession after March 15, sources noted.Despite a decrease in output, coking coal prices have dropped in Linfen, with low-sulphur premium primary coking coal at 720 yuan/t in March, down 20 yuan/t from a month ago, one local mine said.Hebei’s coking coal market was also on the downward trend. Handan-based Fengfeng Group, owned by Jizhong Energy Group, was said would cut the price of low-sulphur washed primary coking coal, mid-sulphur washed fat coal and 1/3 coking coal by 30 yuan/t in Handan, effective March 15, said one source.One Hebei-based end user said it has adjusted down purchase price of washed coking coal by 10 yuan/t from March 11; another local buyer said Hebei’s key mines have cut 30 yuan/t for coking coal prices.Besides, one steel mill from eastern China said Shandong’s big miners have promised to cut prices by 20-30 yuan/t. "We have shut three furnaces and adjacent mills are also limiting output amid stricter environmental control," said one insider with the mill. "We are controlling purchases for high-sulphur coal unless the price is very competitive.".Another source also noted the environmental pressure, saying that the Tangshan municipal government has recently reiterated banning the use of coal with sulphur above 0.6%, a measure rolled out in October 2013."High-sulphur coal producers would face big pressure, if the government strictly implements such measures," the source added.