JFE Steel, Japan's No.2 steelmaker, plans to buy more coking coal from the spot market to boost activity and make prices more transparent for the industry's price benchmark setter, aiming to stabilize a rocky market, a senior official said.
Spot trading for the key steelmaking ingredient slumped and and prices turned volatile after the world's top consumer, China, shut out coking coal from top producer Australia in 2020 and switched to less traceable, cheaper supplies from Russia and Mongolia.
JFE senior vice president Hiroshi Daimon said the lack of spot deals had helped drive up coking coal prices and put them out of line with the other key steelmaking ingredient, iron ore, pointing to possible trades intended to manipulate the coking coal benchmark.
"There are various factors such as China's import ban, Russia's invasion of Ukraine, but the (coking) coal market has a problem because there are very few transactions in the first place," Daimon said in rare comments by a steelmaker on buying strategy.
