Coking Coal import offers have continued to remain at high rates due to the tight supply situation in the Australian market. However, indications of improvement in supply have started brewing, and there could be some price corrections in the near future.
The latest import offers of the Premium HCC are assessed at USD 224/MT CFR India; and that of the 64 Mid Vol HCC at USD 222/MT CFR India. A week-on-week comparison shows that the offers have not deviated noticeably.
Australian sellers have quoted these offers at: USD 215/MT and USD 213/MT respectively on FoB basis.
Source: Market Participants
The tight supply situation is expected to ease in the coming days as production in the affected mines in Australia has restarted. Supplies have gradually started getting better as a result.
In an interesting note, a section of buyers in India expect Coking Coal prices to decline by Nov’16 as cargos have become available. According to the inputs received, there are four cargos available for immediate shipment.
Coking Coal demand from now on will be driven by Chinese consumption as Indian steel industry is not performing well, due to high raw material prices. Indian steel makers seem to be hesitating in booking Coking Coal import cargos in view of subdued demand for steel products in the country.
Moreover, liquidity crunch among Indian steel makers will also hamper Coking Coal imports into the country.
Some market participants in India expect Coking Coal prices to go down below the $200/MT mark in Nov’16, and hover somewhere at around $150/MT.
The slowdown in the global automobile industry is also going to impact negatively to the demand for the coal variant.
Besides, the supply disruptions in the Shanxi Province in China have been resolved. Coking Coal imports into China are going to remain intact on account of the robust steel production.
IMPORTS
Coking Coal imports into India in Sep’16 had increased by 3.5% to 3.84 MnT, according to data compiled by CoalMint Research.
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