Australian Coking Coal: Premium HCC price goes up on ex-China demand

Australian premium low-volatile (PLV) hard coking coal (HCC) price has increased marginally during the latter half of the week, with fresh bookings done on FOB basis, but medium-volatile HCC price has edged lower amid subdued demand in China.

An 85,000 t cargo of premium HCC, with September-end laycan, was traded yesterday at $109/t FOB Australia. Another PLV booking for 75,000 t with September-end laycan was reported on Wednesday at $102/t FOB Australia.

Seaborne coking coal prices in the FOB market are supported because steel mills in European and East Asian countries such as Japan, South Korea and India are gradually resuming their normalized level of operations, depending upon the prevailing COVID-19 situation and governmental directives.

Chinese Market Scenario–
Prices for Australian-origin coking coal, delivered into China, have remained relatively flat due to a lack of trading activities.

This is predominantly because Chinese market participants are still faced with stringent regulatory constraints such as limited import quotas and lengthy waiting times for material unloading at all major coal-handling ports.

In fact, several Chinese end-users had been willing to curtail their hard coking coal term contract volumes due to the lack of import quotas. There are also concerns that the issuance of import permits, specifically for Australia-originated commodities, may now take up to 11 days for shipments arriving at Chinese ports.

Indian Market Scenario–
The Indian market for seaborne coking coal observed an increase in enquiries for spot cargoes, although it is still uncertain as to how soon these enquiries would translate into firm bookings.

Demand for imported coking coal is still weaker as compared to same period last year, as there hasn’t been any significant improvement in steel product sales; although production cuts have been largely withdrawn across much of the country’s steel manufacturing plants.

Near-term Outlook–
China-based trader sources expect that premium hard coking coal prices would stay at current lower levels until customs policies are changed. Demand is expected to remain sluggish until October, when end-users can utilize next year’s import quota.

Indian market participants anticipate seaborne coking coal demand to eventually pick up on restocking needs, as most steel mills have resumed normalized operations and the ongoing monsoon season might end as early as next month.

PRICE ASSESSMENTS

Coking Coal
Latest offers for the Premium HCC grade are assessed at around $108.25/t FOB Australia, while offers for the 64 Mid Vol HCC grade are assessed at around $85.90/t FOB Australia.

For Indian buyers, these offers amount to $122.35/t and $100.00/t respectively on CNF India basis.

Pulverized Coal Injection (PCI) & Semi Soft Coking Coal

[Prices in US Dollar per tonne ($/t)]

~

By Aditya Sinha