Seaborne coking coal prices have begun reversing their sliding trend although there has not been any positive movement so far this week.
Up until recently, coking coal prices were undergoing a downward trend in the absence of strong demand amidst ample supply—especially from Australia, the world’s largest exporter of the fuel. Hence, the buyers of the coal were finding themselves in a comfort zone on account of the decreased prices; they postponed their purchases, and were waiting for the prices to decline to significant levels.
Interestingly, however, the coking coal prices commenced an upward trend in the past week spurred by firm steel consumption in China—the world’s major importer of coking coal.
In fact, the global metallurgical coal market now appears to be poised for further strength owing to the prospects of end-user demand growth in the Chinese construction sector.
In addition, China’s total coal production, including both thermal and coking grades, has dropped over the past few months, compelling the Chinese steel makers to rely heavily on seaborne coals. Accordingly, the country’s coking coal imports have surged 38% M-o-M to 4.02 MnT in Mar’18 from 2.91 MnT in Feb’18, according to customs data released on 24 Apr’18.
On the pricing front, offers for the Premium Low-Vol HCC grade are currently pegged at USD 184.50/MT FoB Australia, lower by about USD 3/MT than the week-ago assessment. However, offers for the 64 Mid-Vol HCC have stayed at around USD 169.75/MT FoB Australia.
On CFR India basis, these offers amount to USD 198.95/MT and USD 184.20/MT respectively.
CFR China prices have gone up by USD 3/MT since last week to USD 197.50/MT.
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