Import block, not accident, spooking China coal market
On Wednesday, a worker was killed in an accident at the mine in the access drift, close to the mine’s surface, prompting mine production to be halted the same day, as reported.
“Though Moranbah North mine produces a good volume of high-quality metallurgical coal, China is not one of its major markets,” a trader based in Shanghai said, adding that met coal from this mine is mainly exported to Japan, South Korea and India.
Moranbah North is an underground mine in Queensland’s Bowen Basin and is 88% owned by Anglo American. For 2018, the mine produced a total of 6.76 million tonnes of met coal, or 31% of the company’s total attributable share of met coal production, Anglo American introduced.
“What further mitigated the impact of the coal mine accident was that China has just restarted the restrictions on imports of all types of coal,” an analyst in Shanghai commented.
In fact, from late last month some ports from Northeast to South China have restarted restricting all types of coal imports to continue controlling coal import volumes this year, as reported. In parallel, the time required for imported coal to clear Customs now at these ports has stretched to 40 days from the usual 5-20 days.
Impacted by the restrictions, some coal traders admitted to Mysteel that they had suspended coal import business, and when they might return to the market is unclear.
Chinese industries including coke-making mainly rely on domestic coal supply. Imported coal is only a supplementary source, with Australia being the largest supplier of coking coal to China. For 2018, China imported 28.3 million tonnes of coking coal from Australia, statistics from China’s General Administration of Customs showed.
As of February 21, the spot price of Australia-origin coking coal remained stable, with the price of Australian coking coal with 10.5% ash and 0.6% sulphur unchanged on week at $205/t CFR China, according to Mysteel’s assessment.
That said, the futures market for coking coal seems to have grown nervous. The most-traded futures prices for coking coal on the Dalian Commodity Exchange – that for May delivery – opened 2% higher on Thursday from the previous day’s settlement price to trade at Yuan 1,285/t ($191.7/t) February 21.
Written by Sean Xie, xiepy@mysteel.com
Edited by Russ McCulloch, russ.mcculloch@mysteel.com
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