Australian coking coal prices surged at the start of this week after Peabody Energy Corp. confirmed that its North Goonyella metallurgical coal mine in Queensland was unlikely to produce any materials in the fourth quarter of this year following the breakout of a fire.
“The extent to which the fire impairs future production from the mine beyond 2018 remains unclear at this point”, but the loss of production from the mine due to the ongoing fire maybe for “an extended and possibly permanent period of time”, opined equity analyst Mark Levin of Seaport Global Securities.
Even though the mine’s annual production of ~2.9 million tons (MnT) in 2017 might seem negligible compared to the ~335 MnT global seaborne market for met coal, the quality of the met coal that North Goonyella produces is worthy of benchmark pricing.
Moreover, persistent vessel queues at Dalrymple Bay, Australia’s largest export met coal terminal, and upcoming planned maintenance works at Hay Point would aggravate the market’s tight supply situation.
Furthermore, Australia’s rainy season is set to begin in December, possibly threatening further supply disruptions.
Additionally, the Chinese government’s pollution-control measures are expected to underpin prices for the steelmaking raw material in the final quarter of this year, especially in the premium segment, with steelmakers favoring materials with low volatile matter, ash and sulfur.
PRICE ASSESSMENTS
The latest price for the Premium HCC grade is assessed at around USD 213/MT FOB Australia, up by about USD 8.50/MT from a week ago (24-30 Sep’18).
Source: CoalMint Research
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