Australian HCC exports market awaits direction

Australian premium low‐vol hard coking coal exports lost
around US$20/ton over August, reaching US$158.50/t by 30 August, as demand for
the steelmaking material remained weak.

Market participants
have been waiting for October‐December HCC
contracts to settle to provide an indicator of
future price direction; and towards the end of the month buyers generally remained
on the sidelines.

Prices of Australian exports have come under pressure from
the lower tradable value of Chinese domestic coking coal, while Indian traders
and mills were waiting for the market to reach bottom.
China has plentiful met coal supply and
typically imports higher grade coal when prices are close to or on par with
domestic prices. Unlike Japanese mills, Chinese blast furnace operators are adept
at blending a wider variety and higher number of coals.

In late August good quality Chinese HCC from Shanxi was
around $162‐170/t CFR north China, including 17% VAT. Lower quality Chinese
coking coal was in the $162‐163/t CFR range.

In the US, high‐vol HCC prices were also weak, ending 29
August at $137/t FOB US east coast.

Source: SBB; Edited