Australian Coking Coal: Prices fall on lower offers amid weak demand

Australian premium low-volatile (PLV) hard coking coal (HCC) prices have resumed their downtrend — after taking a 2-week pause — on lower offers due to weak physical demand seen in the Asian spot market.

The seaborne coking coal market saw ongoing negotiations in the premium hard coking coal segment, with sellers continuing to lower offers to attract demand from end-users. However, many buyers have been reluctant to procure seaborne cargoes in light of stringent port-clearance policies in China.

While it seems that there is abundant supply of seaborne coking coal cargoes, with mid- to late-June laycan, buying interests from Chinese end-users have been constrained by limited import quotas, which may possibly lead to a drop in seaborne prices.

India-based steel mills have relatively high inventory levels at the moment because of reduced outputs, as the country has been on a lockdown since March 25, which was initially due to be lifted on April 14 but was extended three times to May 3, May 17 and May 31.

Elsewhere, Japanese steel mills, including Nippon Steel, are said to be planning to increase their production, albeit miniscule, as the country’s automotive manufacturers have resumed operations.

Meanwhile, Australian miners are heard to remain optimistic about seaborne coking coal prices rising in June, with the expectation that import demand from India and countries in Europe would gradually pick up in line with the graded opening up of lockdown restrictions following the Coronavirus (COVID-19) outbreak since early March.

PRICE ASSESSMENTS

Coking Coal

Latest offers for the Premium HCC grade are assessed at around US$ 113.00/t FOB Australia, while offers for the 64 Mid Vol HCC grade are presently assessed at around US$ 91.30/t FOB Australia.

For Indian buyers, the above offers amount to US$ 122.50/t and US$ 100.80/t respectively on CNF India basis.

Pulverized Coal Injection (PCI) & Semi Soft Coking Coal

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