Australian Coking Coal: Prices Continue Decline amid Concerns on Chinese Port Restrictions

Seaborne premium hard coking coal fob Australia price resumed its southward journey, following a low and stable start to the week; while the cfr China price continued to remain firm notwithstanding subdued trading activity in the spot market.

Nevertheless, the medium-volatile hard coking coal prices have held relatively steady over the past few days on the back of sturdier demand for Australian hard coking coal – of low ash and sulfur content – among Chinese buyers.

A limited supply of such top end second-tier materials has also supported prices in this segment — effectively shortening the price gap between coking coal grades.

Chinese Coal Import Curbs Regain Focus with Reemergence of Port Restrictions

Chinese authorities have reportedly halted custom declarations for all coal imports at the port of Caofeidian located in the northeastern province of Hebei.

Even though the Caofeidian port restrictions are likely to impact only a miniscule volume of seaborne coal imports, the move has raised concerns about the likelihood of further tightening of import rules in the coming weeks.

According to market sources, China’s overall volume of coal imports has exceeded the desired level expected for the first-half of the year, potentially leading to the implementation of stringent restrictions. In fact, the Chinese ports are expected to exhaust their annual import quotas for coal by September.

Notably, China has already brought in a total of 154.49 million tonnes (MnT) of coal over January-June, including both thermal and metallurgical coals, up 5.8% compared against the corresponding period of 2018, as per latest customs data.

However, the country’s coal imports have fallen by 1.4% from the previous month to 27.1 MnT in June, as local miners boosted output to ensure adequate supply ahead of summer season.

PRICE ASSESSMENTS

Latest offers for the Premium HCC grade are assessed at around USD 183.00/MT FOB Australia, lower by USD 3.70/MT than the average rate of USD 186.70/MT prevailing in the week gone by (8-12 Jul’19).

Offers for the 64 Mid Vol HCC grade are assessed at around USD 172.75/MT FOB Australia.

For Indian buyers, the above offers amount to USD 198.25/MT and USD 188.00/MT respectively on CNF India basis.

Pulverized Coal Injection (PCI)

N.B.: All prices are in USD/MT