Australian Coking Coal: Prices Plunge on Hefty Discounts amid Trade Lull

Australian coking coal prices fell further this week, with steel mills outside of China struggling with depressed demand conditions amid the corona virus pandemic, and the resulting buildup of steel inventories due to lack of downstream activities following lockdowns across several major export destinations in the Asia-Pacific region.

While there continues to be a prolonged lack of fresh spot activity in the global market ex-China, competitive offers from mining firms seeking to offload existing inventories have been exerting downward pressure on prices.

Several mining companies have been aggressively lowering their offers to regenerate buying interest in a muted market. Also, a few Indian buyers were heard to have started discussions with suppliers over the tentative cancellation of cargoes.

The ongoing lockdown in India has disrupted shipments from overseas coal suppliers as port restrictions have been exacerbated by transportation disruptions and labor shortages, with many workers having returned to their hometowns.

With the Indian ports prioritizing on the receipt of essential commodities such as oil and thermal coal rather than coking coal, Indian steelmakers are facing challenges in continuing to operate amid the government restrictions.

Although the country’s steel mills are still allowed to continue operating, such supply difficulties and logistical bottlenecks pose a considerable challenge. Further, there remains a concern that India’s lockdown may be extended as Covid-19 infections continue to rise.

PRICE ASSESSMENTS

Latest offers for the Premium HCC grade are assessed at around USD 121.50/MT FOB Australia, while offers for the 64 Mid Vol HCC grade are assessed at around USD 109.45/MT FOB Australia.

For Indian buyers, the above offers amount to USD 130.10/MT and USD 118.05/MT respectively on CNF India basis.

Pulverized Coal Injection (PCI) & Semi Soft Coking Coal

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