Australian Coking Coal: Prices Hold Steady, But Trade Activity Stalled

Seaborne metallurgical coal prices have remained largely unchanged lately – since the sharp fall towards the end of last week – without any substantial buying interest heard amongst either traders or end-users in China as well as internationally.

China: Market Overview

Trading activities in the Chinese market have stalled as a result of the ongoing restrictions imposed at several major seaborne coal handling ports, including China’s main coking coal import port of Jingtang located in the northeastern Hebei Province.

Early last week, the Chinese port of Caofeidian – also located in Hebei Province – restricted customs declarations to only local end users. Thus, foreign traders were effectively debarred from unloading their imported cargoes at the port.

In addition to such restrictions put in place at key coking coal ports like Jingtang and Caofeidian, custom clearance delays at Qingdao and Fangcheng ports were reported by multiple sources.

China’s overall volume of coal imports has reportedly exceeded the desired level expected for the first-half of the year, potentially leading to the implementation of stringent port restrictions. In fact, most of the Chinese ports are anticipated to exhaust their annual import quotas for coal by September.

Notably, China has already brought in a total of 154.49 million tonnes (MnT) of coal over January-June, including both thermal and metallurgical coals, up 5.8% compared against the corresponding period of 2018, as per latest shipment data.

India: Current Market Scenario

Indian market fundamentals continue to stay bearish due to lower steel production margins from higher raw material procurement costs, especially of iron ore.

A considerable demand from Indian end-user buyers is expected to return post-monsoon in the month of September.

PRICE ASSESSMENTS

Latest offers for the Premium HCC grade are assessed at around USD 174.75/MT FOB Australia, lower by USD 6.65/MT than the average rate of USD 181.40/MT prevailing in the week gone by (15-19 Jul’19).

Offers for the 64 Mid Vol HCC grade are assessed at around USD 166.05/MT FOB Australia.

For Indian buyers, the above offers amount to USD 191.75/MT and USD 183.05/MT respectively on CNF India basis.

Pulverized Coal Injection (PCI) & Semi Soft Coking Coal

N.B.: All prices are in USD/MT