The Coking coal market has come under the influence of supply tightness, driving the prices up.
In Australia, supply has come under pressure as not only demand has risen but also several Coking coal mines in and around the Queensland region have been undergoing maintenance or facing production issues.
In China, domestic supply of Coking coal has been disrupted as several highways in the Shanxi region were closed for repairs after the heavy rainfall in July’16. At the same time, demand for the coal variant has risen substantially in China as steel mills were running at high rates due to the rising demand for steel. A revival of the manufacturing and construction sectors in China has driven consumption of steel to high levels, leading to higher imports.
As a consequence of the rising demand and tight supply, prices of the coal variant have risen by more than 70% since Feb’16. On 25 Aug’16, prices of the Premium Hard Coking Coal were reported significantly higher at USD 127/MT FoB Australia. The rising Coking coal prices will also impact Met coke prices.
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