In what could be regarded as the biggest rally during the last four years, Premium Hard Coking Coal prices have surged to USD 205/MT FoB Australia, the highest since 2012. For Indian buyers, the export prices translate to USD 215/MT on CFR India basis.
The price rally has come at a time when Indian steel mills are running at high operating rates, on account of healthy demand for home-made steel products. Imposition of the Minimum Import Price (MIP) by the Government of India has invigorated the country’s steel industry as the demand shifted towards domestic steel products from imported variants.
Source: Market Source:Market Participants
The steep price upswing has originated on account of supply disruptions in Australia as well as in China.
Several coal mines in the Queensland region of Australia have been undergoing supply constraints, leading to constricted supply. At the same time, coal production in China has been declining due to the efforts of the Chinese government to bring down domestic production to curb over-supply and lowering pollution. The Chinese government has reduced the number of annual working days for coal miners to 276 from 330 as a part of the production curtailing mandate.
Spot prices of the Premium Hard Coking Coal were last seen crossing the USD 200/MT mark in 2011 and 2012, when, heavy flood had ravaged Australia’s Queensland region, shrinking one-third of the global supply.
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