Prices of metallurgical coal, especially premium hard coking coal, are likely to remain at high levels in China this year, predicted Sarah Liu, Vice President of Fenwei Energy Information Services, at the 9th Global Coking Coal Resource & Market Summit held in Beijing on 11 April.
Prices of the steelmaking material would be mainly buoyed by a structural supply shortage, intensified safety and environmental checks and import curbs this year, Liu pointed out at the summit, which is hosted by industry portal sxcoal.com, owned by Fenwei Energy.
While the domestic market may remain volatile, the average price of premium coking coal, represented by Liulin low sulfur coal, is expected to rise to 1627 yuan/t on ex-washplant basis this year, a 13 yuan/t increase compared with the 2018 level, Liu forecast.
The average price of CCI Liulin low sulfur primary metallurgical coal was 1614 yuan/t last year, ex-washplant with VAT, up by 15% from 2017’s 1405 yuan/t; Shanxi primary metallurgical coal price averaged 1761 yuan/t at Jingtang port, ex-stock with VAT, up by 13%, showed data from sxcoal.com.
China shares a similar trend in metallurgical coal prices with the global market, as the two markets are closely connected, but international prices are more sensitive to market changes and fluctuate more frequently, Liu noted.
China continued to push ahead de-capacity in the coal industry in the past year, with the focus shifting from total capacity reduction to structural capacity optimisation mainly through expanding advanced mining capacities vigorously. Yet, the increase of metallurgical coal capacity remained limited, she noted.
China, which boasts an annual import demand of 40 million t for seaborne metallurgical coal, is of great significance to the global metallurgical coal market. It remains the largest steel, coke and coal producer and consumer in the world, Liu said.
China saw a tight balance between metallurgical coal supply and demand on the whole in 2018. Total domestic supply increased 2.4% y/y to 454 million t, and imports dropped 6.4% to 64.9 million t, while total demand reached 520 million t, up from 515 million t in 2017, according to Liu.
Fenwei has launched a series of coal-related market reports, ranging from daily, weekly, monthly to annual, to closely track market changes and provide insights that could assist industry players around the world.
Read the article online at: https://www.worldcoal.com/coal/12042019/chinas-metallurgical-coal-prices-to-remain-high-in-2019-reports-fenwei/