Relatively mild weather in China and uncertainty caused by the possibility of inflation-cooling measures by the government are limiting Chinese mills' appetite for high-priced imported coking coal, market sources said Tuesday.
These factors, perhaps combined with sub-par demand from other global steelmakers, appeared to be offsetting supply-side constraints, including Australian rain-related temporary rail interruptions and speed limitations.
Platts Premium Low Vol was unchanged on the day at $218/mt FOB Australia, while HCC 64 Mid Vol remained at $202/mt FOB.
A trader was offered an Australian hard coking coal of a quality in line with Oaky Creek, at $220/mt FOB, or $238/mt CFR China but said a deal could not work at this price. Other spot offers for premium and so-called super-premium brands, some of which were heard second-hand, were in a wide range of $250-265/mt CFR China.
Other non-premium hard coking coals such as Peabody's Metropolitan Hard or Jellinbah's Lake Vermont were talked at or just below October to December 2010 benchmark levels ($202-205/mt FOB). But no new deals were reported done.
Chinese traders were in agreement that coking coal spot demand, including for hard and premium hard coking coals was not great. "A week ago, things looked better but recently, it hasn't been so good," a Beijing-based trader said, citing lower sales volumes of port stocks this week, and describing supply as "satisfactory." "We will have to drop our offers," she said.
Another China trader reinforced this idea, saying the winter wasn't cold yet, and that in addition the steel mills were worried about the possible impact of inflation curbs on steel prices.
Colder temperatures have the potential to disrupt logistics and increase competition with steam coal for transport capacity.
In Australia, a miner agreed that Chinese restocking had yet to begin in earnest. "The winter hasn't bit yet, either in China or Australia, although rain has caused temporary cuts on both the Blackwater and Goonyella lines," he said. This could tighten supply, on top of speed limitations imposed last Friday on the Goonyella Rail System, he added.
Some traders felt that there was room for the market to rise in December when weather events are likely to become more disruptive.
But many forecast some weakness at the end of the year or into January, when mills might avoid buying as the cargoes' arrival could clash with the Spring Festival in early February. This was limiting trader appetite for taking speculative positions.
The Indian steel market remained downbeat with steel prices actually falling, a Delhi-based mill source said. "India is absolutely dead," a Singapore trader said, referring to the country's coking coal import market.
Broadly, the PCI and semi-soft markets appeared to be "better" supplied than the higher grade coking coals, and one EU mill source reported still receiving a steady flow of offers for extra volumes or trial tonnages.
With Japan away on Labor Thanksgiving Day, there was no further news on contract negotiations for the January to March 2011 quarter.
These factors, perhaps combined with sub-par demand from other global steelmakers, appeared to be offsetting supply-side constraints, including Australian rain-related temporary rail interruptions and speed limitations.
Platts Premium Low Vol was unchanged on the day at $218/mt FOB Australia, while HCC 64 Mid Vol remained at $202/mt FOB.
A trader was offered an Australian hard coking coal of a quality in line with Oaky Creek, at $220/mt FOB, or $238/mt CFR China but said a deal could not work at this price. Other spot offers for premium and so-called super-premium brands, some of which were heard second-hand, were in a wide range of $250-265/mt CFR China.
Other non-premium hard coking coals such as Peabody's Metropolitan Hard or Jellinbah's Lake Vermont were talked at or just below October to December 2010 benchmark levels ($202-205/mt FOB). But no new deals were reported done.
Chinese traders were in agreement that coking coal spot demand, including for hard and premium hard coking coals was not great. "A week ago, things looked better but recently, it hasn't been so good," a Beijing-based trader said, citing lower sales volumes of port stocks this week, and describing supply as "satisfactory." "We will have to drop our offers," she said.
Another China trader reinforced this idea, saying the winter wasn't cold yet, and that in addition the steel mills were worried about the possible impact of inflation curbs on steel prices.
Colder temperatures have the potential to disrupt logistics and increase competition with steam coal for transport capacity.
In Australia, a miner agreed that Chinese restocking had yet to begin in earnest. "The winter hasn't bit yet, either in China or Australia, although rain has caused temporary cuts on both the Blackwater and Goonyella lines," he said. This could tighten supply, on top of speed limitations imposed last Friday on the Goonyella Rail System, he added.
Some traders felt that there was room for the market to rise in December when weather events are likely to become more disruptive.
But many forecast some weakness at the end of the year or into January, when mills might avoid buying as the cargoes' arrival could clash with the Spring Festival in early February. This was limiting trader appetite for taking speculative positions.
The Indian steel market remained downbeat with steel prices actually falling, a Delhi-based mill source said. "India is absolutely dead," a Singapore trader said, referring to the country's coking coal import market.
Broadly, the PCI and semi-soft markets appeared to be "better" supplied than the higher grade coking coals, and one EU mill source reported still receiving a steady flow of offers for extra volumes or trial tonnages.
With Japan away on Labor Thanksgiving Day, there was no further news on contract negotiations for the January to March 2011 quarter.
