Met coal market has suffered declination yet another week. Prices have fallen by USD 1-2/MT this week.
Falling demand has already plunged down coking coal significantly in this fiscal. Prices of premium grade hard coking coal from Australia have fallen by 28% in a year’s time.
Currently, Premium HCC offers from Australia are hovering within USD 78-79/ MT, CFR India; registering a downfall of USD 2-3/MT. Last week, Australian PHCC offers were assessed at USD 81-82/MT, CFR India.
Meanwhile, Australian HCC futures fell by USD 1-2/MT in a week’s time and are currently assessed at USD 76-77/MT, CFR India.
Falling demand of Met coal among Chinese steelmakers has affected Met coal futures badly. According to latest release by Chinese custom, the country has imported 3.08 MnT coal in Oct’15.
India has surpassed the world’s 2nd largest economy in Met coal import. In Oct’15, the country imported about 4.7 MnT of coking coal.
FTA enforced, Australian Met coal tax-free in China
According to latest buzz, China is all set to remove 3% import duty on Australian Met coal in the 3rd week of December this year. The agreement was to be enforced later in next year but has been preponed and will be enforced from this year.
This move will somehow provide competitive edge to Australian exporters over other coking coal exporter in the world. Earlier in Oct’14, China enjoined an import duty of 3% on Australian Met coal to protect its indigenous material.
Global contract price
Global contract prices for Q1 CY16 are heard to be announced latest by next week. According to sources, price is expected to be settled at USD 83-84/MT for the first quarter.
It should be noted that contract price for coking coal was settled at USD 89/MT for Q4 CY15, registering a decline of about 24% compared to Q1 CY15. Production increased continuously from the giant coking coal exporter, Australia.
There were strict rules and regulation on import of coking coal by China, the major importer of coking coal. Together, these resulted in over supply of material, which caused crashing of prices in global market in CY15.
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