Australian Coking Coal: Prices inch up on Chinese bookings

Australian hard coking coal (HCC) prices have staged a modest recovery over the past two weeks with bookings for the premium low-volatile (PLV) grade concluded at higher levels amid sustained buying interest in China.

CoalMint assessed the FOB Australia price for PLV HCC up by US$ 4.25 per tonne (t) week-on-week, and HCC 64 Mid Vol up by US$ 2.10/t over the same period.

The Chinese steel market has made a quick recovery after the 76-day lockdown following the Covid-19 viral outbreak. Steel inventories are gradually exhausting with normalized production rates and steelmakers are earning margins, leading to a resurgence in demand for metallurgical coke, and in turn for coking coal.

Meanwhile, a negative signal for market sentiment was observed in the midst of news of China’s National Development and Reform Commission discouraging Australian thermal coal imports.

Alongside deepening worries about tightening port policies, Chinese buyers were heard to await more details as to if the NDRC’s stance would include metallurgical coal imports as well.

Several other buyers were heard to also consider the higher cost incurred for procuring seaborne coals due to longer waiting time at the ports.

However, healthy steel sales and production levels suggest that China-delivered prices for seaborne coking coal are well expected to remain at current levels for a while, but if steel mill profits continue to be relatively low, the current price levels of coking coal cannot be supported.

PRICE ASSESSMENTS

Coking Coal

Latest offers for the Premium HCC grade are assessed at around US$ 118.25/t FOB Australia, while offers for the 64 Mid Vol HCC grade are presently assessed at around US$ 91.25/t FOB Australia.

For Indian buyers, the above offers amount to US$ 127.45/t and US$ 100.45/t respectively on CNF India basis.

Pulverized Coal Injection (PCI) & Semi Soft Coking Coal

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