What’s the significance of these three numbers, you might ask?

Put a dollar sign in front of them, and think calcined coke. No, it’s not a joke and it’s not April Fool’s Day, which isn’t celebrated in China anyway.

It the price of a recent sale of calcined coke to a large smelter group. I am not going to name the buyer or the seller, though they are both well known to us here at AZ China. The price is FOB, and it is for a coke which is today considered to be at the bottom end of the mid-band of properties - with sulphur close to 3%, and vanadium and nickel combined sitting at around 500ppm.

This marks a new low in CPC pricing, certainly in recent history (though I remember when I used to buy it at $170.) It says something about the desperate times that the CPC market is facing, with new capacity in China coming on stream just as buyers around the world are treading water. Buyers are worried that head office is going to slash metal production, in the face of low metal prices.

A transaction at this level carries risk. For the buyer, he risks that the seller will not perform, or will perhaps push product quality to the very lowest levels of the specification. For the seller, the risk is first that he loses money on the transaction - though that’s not a risk, that’s a certainty - and second, that he drags the rest of the market down to this level and conditions the market to accept this price point. Pain and suffering for everybody on the supply side of the table. Buyers will no doubt rush to get their contracts down to this level, ensuring that one supplier’s actions hurt the entire market.

The irony is that we see CPC prices rising, especially in the medium term, perhaps once we get past the first quarter of next year. But more on that in our Black China Reports.