Australian premium low-volatile (PLV) hard coking coal (HCC) FoB price has remained steady over the past week, as both sellers and buyers retreated to the sidelines in ex-China markets.
Overall market fundamentals remain generally negative with thin buying interest, as buyers turned cautious amid uncertainties over the near-term demand outlook.
Many participants chose to adopt a wait-and-see approach following a sharp fall of $15/t for PLV FOB Australia due to a European steelmaker’s trade reported done on 10 Feb. The sell tender was for 75,000 t of BMA’s Australian PLV Peak Downs, concluded at $139/t FOB Australia, with late-March laycan.
Meanwhile, delivered prices to India surged due to strong demand from Indian steel mills coupled with weather-related supply concerns in Australia alongside notably higher shipping freight rates in the Asia-Pacific Panamax route.
The Indian market has lately been observing a steady resurgence in restocking demand for coking coal on the back of strong demand for steel and healthy production levels, coupled with a buoyant metallurgical coke market.
India Coking Coal Import Shipment Vessel Lineup
CoalMint’s latest vessel lineup shipment data reveals that a total quantity of 1,872,225 t of Australian coking coal is expected to reach various Indian ports by 2nd Mar’21.
137,000 t Dhamra (Odisha)
156,303 t Gangavaram (Visakhapatnam)
336,153 t Haldia (West Bengal)
283,544 t Jaigarh (Maharashtra)
278,827 t Krishnapatnam (Andhra Pradesh)
83,055 t Mormugao (Goa)
412,343 t Paradip (Odisha)
185,000 t Vizag (Andhra Pradesh)
Price Assessments
Latest prices for the Premium HCC and the 64 Mid Vol HCC grades are assessed at around $139.00/t and $132.25/t FOB Hay Point, Australia.
For Indian buyers, these prices amount to $164.40/t and $157.65/t respectively on CNF India basis.
Australia-India dry bulk freight rate is currently assessed at $25.40/t (+67% w-o-w) for delivery by Panamax vessel class.
Outlook
There are mixed views on demand and prices outlook due to lack of clarity on market directions and amid lower-priced offers available for ex-Chinese spot buyers.
However, Australian hard coking coal prices are largely anticipated to soften in the near future until the Chinese import ban on Australian coals is lifted allowing market participants to step back to the spot market.
China-based end-users and traders have been actively seeking reselling opportunities since prices recovered after hitting rock bottom in January. This has, in turn, increased the spot availability of cheaper seaborne coking coal cargoes for Asian buyers outside of China.
Hence, there is limited upside potential for spot prices of Australian premium coking coal due to the influx of lower-priced resale cargoes from China in the ex-Chinese market.
Eventually, however, limited spot availability and relatively stable demand from end-users in major ex-China markets, including India, should keep prices supported to an extent for premium-grade coking coal.
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By Aditya Sinha
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