Coking Coal spot prices in Australia have continued to move upwards under the influence of tighter availability of cargoes.
With the winter holidays in Australia round the corner, steel makers in the major nations, including those in India, have become aggressive in importing the coal for stocking inventories for the holiday period, in which there will be no supply. In Australia, coal mining companies will be closed from 20 Dec’17 to 8 Jan’18 due to the holidays. Moreover, the imminence of the rainy season in Australia also has added fuel to the fire to the importing propensity among the steel producers. The rainy season, to begin in the later part of Dec’17, is also expected cause supply disruption. Heavy rains are likely to disrupt coal supplies by flooding rail lines, coal mines and roads; in the event of which, the coal export availability will come under pressure.
Another factor contributing to the supply tightness is the stoppage in production at one of the two Coking Coal mines, owned by Glencore, at its Oaky Creek Complex in Queensland of Australia. Although there has been no official statement by the company in this regard, rumors of the mineable coal getting exhausted were doing the rounds among the market participants.
Amidst the prevalence of supply tightness, importers are also being confronted with delays in shipments of their import consignments due to congestion in the major coal handling port terminals in Australia. According to the latest inputs received, there are 88 coal vessels waiting at the coal handling port terminals in Australia. Out of the terminals, there are 44 waiting vessels at the Dalrymple Bay Coal Terminal (DBCT). Ongoing maintenance activities are causing the port delays as lesser number of vessels could be loaded. In the DBCT, the berth no 2 has been down for maintenance since 5Nov’17, and the maintenance will continue at least up to 5Dec’17. The Port Kembla Coal Terminal is closed for two weeks due to the installation of a new ship loader.
Under the influence of the supply tightness and stronger demand, the spot prices of Coking Coal have continuously moved upwards.
The latest export offer for the Premium HCC is assessed at around USD 206.50/MT FoB, which is higher by around USD 12.5/MT over the offer in the week last. In a similar trend, the recent offer for the 64 Mid Vol HCC is assessed at around USD 166.40/MT FoB, which is up by around USD 12.15/MT against the week-ago offer.
Source: CoalMint Research
For Indian buyers, these offers translate into: USD 219.50/MT and USD 179.40/MT respectively on CFR India basis.
During the period of 1-27Nov’17, around 3.7 MnT of Coking Coal was imported in India, data compiled by CoalMint Research shows.
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