Australian coking coal prices have been moving in different directions this week, as the premium grade has been edging down progressively, on limited deals as buyers waited on the sidelines despite adequate availability.
The seaborne premium hard coking coal market continued its downtrend amid ample availability in the ex-China market on lower price indications and relatively fewer bids reported for prompt loading cargoes; while China-based buyers waited on the sidelines due to a lack of spot offers.
Presently, premium hard coking coal is cheaper due to ample supply following China’s import ban from Australia, while semi soft and PCI prices are higher due to the floods in eastern Australia.
However, Australian premium low-volatile (PLV) hard coking coal (HCC) FoB price increased marginally with recent PLV bookings concluded earlier this week at higher prices, thus indicating that restocking demand may gradually emerge in the premium coking coal segment at the current price level in the ex-China market.
Furthermore, the price gap between offers and bids has widened after buyers lowered their bid levels in view of negative short-term sentiment in ex-Chinese markets. Short-term market outlook remains bearish on limited buying interest, as the excess supply relative to weaker spot demand may leave spot prices soft in the near term.
Price Assessments
Latest prices for the Premium HCC and the 64 Mid Vol HCC grades are assessed at around $111.50/t (-0.9% w-o-w) and $108.25/t (+0.7% w-o-w) FOB Hay Point, Australia.
For Indian buyers, these prices amount to $135.80/t (+0.3% w-o-w) and $132.55/t (+1.7% w-o-w) respectively on CNF India basis.
Australia-India dry bulk freight rate is currently assessed at $24.30/t (+6.3% w-o-w) for delivery by Panamax vessel class.
Outlook
At present, the outlook for spot buying interest from India appears bleak, as most large steel mills rely on long-term contracts while mid- and small-sized end users are seemingly well stocked for now until May or June as they booked cargoes when PLV HCC FOB prices were at $100-105/t in early January.
Besides, Indian buyers are mostly refraining from immediate procurement of seaborne coking coal cargoes in hopes that offers could decline further.
Hence, overall demand revival for spot purchases of seaborne coking coal by Indian steel mills would likely take a while and is anticipated to start showing signs of improvement in the latter half of the next quarter at the earliest.
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By Aditya Sinha
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