Spot HCC prices have increased by a further ~$19/t to $195/t since our last update on July 27, as Chinese mills restocked coking coal tapping into a tight seaborne market. Seaborne prices have spiked, but with the physical arb between domestic and seaborne prices now largely closed and steel prices topping out, appetite for expensive, seaborne cargoes appear to be waning.
Over the past three weeks, soaring steelmaking margins and low coke inventories have prompted both Chinese steel mills and coking plants to restock. According to Mysteel data, coking coal inventories at both plants and mills increased to ~14 days in mid-August, the highest level in 2017 since Chinese New Year.
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David Llewellyn-Smith is Chief Strategist at the MB Fund and MB Super. David is the founding publisher and editor of MacroBusiness and was the founding publisher and global economy editor of The Diplomat, the Asia Pacific’s leading geo-politics and economics portal.
He is also a former gold trader and economic commentator at The Sydney Morning Herald, The Age, the ABC and Business Spectator. He is the co-author of The Great Crash of 2008 with Ross Garnaut and was the editor of the second Garnaut Climate Change Review.
