Global met coal, coke markets stable; Russian PCI finds home in Southeast Asia

• Premium HCC prices stable amid buyer-seller standoff
  
  
• Indonesian coke firm on tight June-loading availability
  
  

Global metallurgical coal, met coke, and PCI markets remained largely rangebound over the past week, with buyers and sellers adopting a wait-and-watch approach. However, selective demand emerged for Russian PCI in Southeast Asia, while Indonesian coke supply stayed tight.

Premium HCC: Buyers resist, sellers hold ground

Benchmark premium low-vol hard coking coal (HCC) prices remained steady over the past week, with limited spot activity reported across key trading hubs.

An Asian trader noted that Tier-1 Australian cargoes continued to remain with traders, with no urgency seen from either side to transact at lower levels. Indian buyers showed limited appetite for seaborne coking coal, preferring coke as an alternative feedstock at current price levels.

A Northeast Asian steelmaker indicated that prevailing FOB levels appeared elevated given the bearish demand sentiment in the region. In China, domestic premium low-vol coal prices improved, but seaborne buying interest remained subdued ahead of the Labour Day holidays. Market participants also cited uncertainty over potential semi-finished steel export controls as a factor limiting fresh bookings.

Russian PCI finds home in Malaysia

While Chinese buyers have been largely focused on lower-priced Russian PCI cargoes, a transaction reported last week highlighted growing interest from other Asian markets.

A 75,000-tonne cargo of Russian Low-vol PCI was concluded at $149/t CFR Malaysia, with loading scheduled for July. The buyer was confirmed to be an end-user.

Other tradable levels for Russian PCI were heard at 138-140/t CFR North China and 152-164/t CFR India, depending on delivery timelines and specifications. Australian low-vol PCI was indicated around $155/t FOB Australia.

Indonesian coke firm on tight supply

Seaborne met coke markets remained supported by tight Indonesian availability. Indonesian BF coke (65% CSR) held firm at around $262/t FOB Indonesia.

An Indonesian supplier source confirmed that June-loading cargoes had been fully sold out, with no rush to offer July positions. CFR India levels for Indonesian coke were indicated at around $285/t.

In China, coke producers pushed for a third round of price hike, though mills resisted, pointing to already healthy coke margins. However, trader sources expect the hikes to eventually be accepted given continued supply tightness in the seaborne market.

Outlook

With China on Labour Day holiday and trading volumes thin, near-term activity is likely to remain subdued. However, several factors are providing underlying support to global met coal and coke markets:

• Potential pre-monsoon restocking in India could lift demand in the coming weeks
  
  
• Tight Indonesian coke supply is expected to extend into July
  
  
• Higher freight costs amid ongoing Middle East tensions are adding to landed costs
  
  

Downside risks include weak rebar demand in key markets and ample availability of unsold premium mid-vol cargoes in the seaborne market.