Market in Brief and Trading Tips:

Metcoke: Prevailing price of domestic metcoke finalized at transactions in these two days was stable. Metcoke market at ports was still in the dilemma of low selling and purchasing. Production limitation carried out by coking plants in Northern China and Eastern China was basically unchanged. Price quoted by several coking plants in Shanxi province dropped as inventory was overpiled. In recent days, price of steel materials plunged drastically and transactions in the spot market were low. Profits made by steel mills fell dramatically and some steel mills had trouble in capital turnover. Blast furnace operation rate of steel mills continued to drop, unfavorable to metcoke market.

As price of coke rose, coking plants had their cost increased and intended to firm up the price of metcoke. The price of metcoke is expected to be steady in the short run and then may turn weak at the end of this month.

Trading tips: Traders should cut their metcoke supplies for buyers on a non-long term contracted basis. Coking plants should be actively in delivery and steel mills can purchase metcoke as usual.

Coking coal: Domestic coking coal market rose amid stability in recent two days, and price of imported coking coal kept rising. Work resumption rate in Shanxi local coal mines was low and price continued to climb. Transactions of low sulphur coking coal in some coal mines were sound. The quoted price rose by another 20 yuan on February 16 and 17 with a total increase of 140 yuan after the work resumption.

Price of Australia coking coal kept rising by 30 yuan. The price of standard I coking coal rose to 1450-1480 yuan/t (pick up by buyers), and that of II grade coking coal priced at 1330-1350 yuan/t.

Trading Tips: Downstream steel mills should procure coking coal as needed, and there is no need for them to pile up coking coal of high price. Coal mines and coal washeries should actively resume work and production.

PCI: Domestic PCI market kept unchanged in recent two days. Price of raw coal in local coal mines in Changzhi, Shanxi province rose by 20-40 yuan. Sales were sound in some coal mines but available supplies were tight. Purchasing price quoted by steel mills continued to rise, with price of PCI anthracite rising by 25 yuan/t and that of PCI bituminous rising by 16 yuan/t.

Thermal coal: Supplies in spot market at ports declined in these two days. Affected by the epidemic, transactions at ports were restrained. Price of thermal coal (Q5500) at the Yangtze River rose by 3 yuan to 608 yuan/t.

Hot issues:

1. According to Ministry of Transport of the People's Republic of China, highway toll fees are free from the midnight of February 17, 2020 to the end of the work of prevention and control of the epidemic.

Comments: To traders of metcoke at ports, such a policy helped them save the freights, but some thought the fast recovery of the transportation and the increase in metcoke inventory at steel mills might exert downward pressure on price of metcoke.

2. Mongolia will close four ports of entry from and into China until March 2 to try to prevent the spread of the coronavirus.

Comments: Imported coal from Mongolia was cut, and price of coal at Mongolia ports and at Australia kept rising.