Australian coking coal prices see mixed trend in Mar’22

Australian coking coal prices remained largely volatile in March. At the beginning of the month, coking coal prices saw a steep rise led by supply concerns against the backdrop of Russia-Ukraine crisis. However, towards the month-end, the same witnessed significant corrections. However, despite high demand, buyers were reluctant to procure because of unaffordable prices.

Australian premium HCC FOB prices, which stood at $457/t on 1 Mar’22, hit an all-time high of $671/t towards mid-March. This massive jump of $214 was backed by the Russia-Ukraine war and subsequent sanctions on Russia. Countries started avoiding purchases of coking coal from Russia and looked for alternatives.

However, European countries remained highly concerned as they faced huge supply disruptions with vessels movement restricted in the Black Sea.

In addition, Australia experienced heavy rainfall in first two weeks of March, resulting in flooding in mining areas and even temporary closure of some key coal exporting ports.

In the fourth week of March, Australian premium HCC FOB prices saw a reversed trend, falling by $131/t to $539/t on 26 March as the global supply situation eased after rains receded in Australia and panic over Russia–Ukraine war subsided.

Imports of coking coal into China remained limited amidst a resurgence of Covid in China and subsequent lockdowns. Chinese traders remained uncertain with most preferring to be on a wait-and-watch mode as the situation in major steel producing hubs is expected take some more time to get back to normalcy.

The astronomically high prices of coking coal made end-users in India cautious. Meanwhile, a few deals were still concluded at this high level but only end-users with urgent needs booked the cargoes.

Coking coal prices found some support in the last few days of March after supply concerns resurfaced after the closure of Moranbah North coking coal mine owned by Anglo American and heavy rainfall in Queensland on 28 March.

However, today (1 Apr’22), Australian premium HCC FOB prices fell by $19/t to $515/t after above mentioned supply concerns subsided.

Coking coal demand is high in Asia and Europe but supply shortage kept prices elevated. Even though coking coal prices corrected, these are still higher and unaffordable. However, as the supply situation improves in the near term, the raw material prices are expected to go down.