Coking Coal prices have fallen further as surplus stocks mounted in the Australian market, and sellers trying hard to dispose-off their stocks, cutting offers. The surplus stocks have accumulated as import demand from China was lower due to increasing domestic production. Coking Coal supply in China has been increasing as coal mines in that country operated at higher rates with the resumption of 330 working days per year rule in coal mines.
On 15Feb’17, spot prices of the Premium HCC dropped sharply to USD 151.50/MT FoB Australia; at the same time, the spot prices of the 64 Mid Vol HCC also declined to USD 144.55/MT FoB Australia.
For Indian buyers, these offers translate into: USD 162.40/MT and USD 155.45/MT respectively on CFR India basis.
According to a market survey conducted by CoalMint, the prices have been coming down as demand waned mainly due to:
>> Chinese buyers negotiated deals at lower prices
>>European user-industries amply stocked, restricting imports
>>Indian buyers lowering imports as the prices are receding
In a buzz that has surfaced, the National Development and Reform Commission of China is mulling restoration of the 276 working days per year rule in coal mines to prevent over-supply in the country. The reduction of the yearly working days to 276 from 330 is likely to be reinstated by mid-Mar’17, when the winter season—in which demand for coal reaches the peak—will end.
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