IMO 2020 has kicked in what in your opinion has been the impact been on the coke trade in China?
Our view at this moment is to see limited impact of IMO 2020 on the Chinese coke export market. In fact, the Chinese coke export volume has declined significantly in recent years. Higher priced Chinese coke lost competitiveness in the export market amid weakness in global steel consumption. The Chinese coke market is typically supported by a higher cost of production and ongoing environmental campaigns.
Can you give us a quick update on the latest situation with the Chinese met coal import arbitrage? How will this affect the Chinese coke market in 2020 and beyond?
The Chinese import arbitrage has been a key supporter to strong Chinese met coal imports for the past 12 months. Our current calculated arb remains above $30/mt open for imports in today’s market. Our near-term view is the arb can possibly remain open with domestic prices supported on the supply tightness while import prices could continue to face headwinds from port quota and restrictions. This scenario can change of course in the next couples of weeks from today.
You will be giving a presentation that centres on looking at the seaborne metallurgical coal market outlook in 2020 and beyond can you give us an overview on the China ferrous supply and demand for iron ore, met coal and steel?
Yes, and I will also be happy to provide an update of the novel coronavirus / COVID-19 outbreak impact on the Chinese ferrous market in general.
In terms of the seaborne metallurgical coal market outlook and you give us an overview on regional trade flows in 2020 and where these may be shifting in 2021 and beyond?
Regrettably we do not have an official forecast of such. We focus rather on short term shift of met coal/coke spot trade flow in the APAC region. For seaborne met coal our view is that regional trade flow will likely remain focused on the traditional destination markets, including China, Japan, Korea, Taiwan and India, with possible additions of demand coming from the ASEAN destination homes. The construction sectors in Indonesia, Philippines, Thailand and Vietnam are expected to support most of the demand for both flat and long steel products in 2020 and beyond.
