Seaborne premium hard coking coal prices have held steady so far this week, following their dizzying upward spiral over the last week, while the 64 mid-vol prices have eroded a bit.
In China, trading activity in the seaborne market has slowed down, with most buyers appearing to tread cautiously at current price levels.
Moreover, finished steel prices for the July-September quarter are expected to decline. And hence, Chinese mills are not willing to pay above $200 per tonne cfr China for premium materials.
Furthermore, the Chinese Yuan has dropped to a more than four-month low against the US dollar, following an impasse in US-China trade negotiations— the currency depreciated below 6.9 to the US dollar this week, touching its lowest level since late December.
China’s currency devaluation increases cost of procuring imported coking coal and in turn, the production cost of steel manufacturing.
On the other hand, the weaker currency will hurt profitability of traders selling seaborne coking coal at Chinese ports.
Meanwhile, Chinese-delivered Premium Low Vol prices may stay firm on persistent demand as China-based steelmakers have become amenable to meet the country’s environmental standards, which require end-users to seek proper-quality coals with high CSR and low ash content.
PRICE ASSESSMENTS
Latest offers for the Premium HCC grade are assessed at around USD 212.50/MT FOB Australia, higher by USD 3.20/MT than the average rate of USD 209.30/MT that prevailed in the week gone by (as on 3 May’19).
Offers for the 64 Mid Vol HCC grade are assessed at around USD 183.10/MT FOB Australia.
For Indian buyers, the above offers amount to USD 224.70/MT and USD 195.30/MT respectively on CNF India basis.
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