Tighter supply has lifted Coking Coal prices to record high. Curtailed production in Australia and China, and at the same time, bulky imports into China have been the main factors for the abrupt price rise for the coal variant.
IMPORT OFFERS GO SIGNIFICANTLY UP
The latest import offers of the Premium HCC are assessed considerably higher at around USD 310/MT CFR India; while, that of the 64 Mid Vol HCC also are assessed significantly up at around USD 262/MT CFR India.
The export offers of the coal variants are at: USD 299.5/MT and USD 251.5/MT respectively on FoB Australia basis.
Source:Market Participants
SUPPLY GETS TIGHTER
Coking Coal imports in China have escalated remarkably as a consequence of shrinking domestic supply due to the Chinese government’s effort to cut down domestic production. At the same time, vigorous steel production in that country necessitated continuous imports of the coal from Australia. According to the latest input received, Coking Coal imports into China remained above 200 MnT in Oct’16 for the fifth consecutive month.
To compound to the over-supply, production in Australia also has declined after a recent incident at the Appin mine in New South Wales. Malfunctioning of a ventilator fan at the mine had raised gas concentration in the mine to alarming levels necessitating repair of the fan that entailed suspension of mining operations for about a month.
In the meantime, Australia-based South32 has acquired the Metropolitan Coking Coal mine at Helensburgh in New South Wales of Australia from Peabody Energy at USD 200 million.
INDIAN STEEL MAKERS RAISE PRICES
Following the upsurge in Coking Coal prices, the majority of flat steel producers in India have hiked their prices by INR 1,500/MT.
Coking Coal is a crucial input for the steel makers in India as 44% of the total 90 MnT of the steel capacity is based on the Blast Furnace technology, which requires Coking Coal.
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