It is reported that the uptrend seen in the international coking coal market has lately been influencing the coke price in China, thereby threatening the profit margins of Chinese steel producers.
According to data released by the China Association of Coal Transporation and Sales, on March 24th the coke price in Shanxi Province stood at CNY 1,450 per tonne while the spot price of coking coals imported from Australia had already reached CNY 1,830 per tonne.
Mr Pan Wanze head of US Peabody Energy Co BTU has stated that some Chinese enterprises have been seeking to import coking coals with his assistance. However, he added, with the Asian economy recovering, there is a lack of availability of coking coals. He also noted the strong price increase accepted by Japanese steelmakers in the supply contract they signed with Australian coal suppliers.
He said that the coal tonnage imported by China exceeded 20% of total coal imports in the Asia-Pacific market. The coal price in the Asia-Pacific market is highly correlated with Chinese market demand. At the same time, the rise in global coal prices can also influence the Chinese market.