Australian coking coal prices inched down further this week, with most market participants adopting a wait-and-see attitude amid the recent price volatility seen in the FOB market for premium coking coal.
The spot market saw relatively fewer bids and offers in the ex-China market for Australian premium low-volatile (PLV) hard coking coal (HCC), but buyers stayed out of the market.
An early-April laycan cargo of 45,000 t PLV HCC traded at $114/t FOB Australia, along with 35,000 t of HCC at $104.50/t FOB Australia on Tuesday, March 16.
Earlier during the week, two trades were done for 45,000 t each of Australian premium hard coking coal at $116/t and $118/t FOB Australia, both with end-April to early-May laycan.
Restocking demand for May-loading cargoes may emerge soon, but April laycan cargoes are still seeing weak buying interest, with firm offers failing to draw demand from buyers. Some market sources, however, are still skeptical about uncertainties over the demand outlook.
Indian coking coal imports subside sharply on limited buying interests
Notably, India’s coking coal imports fell by 20% to 4.58 mn t in Feb’21, compared with 5.74 mn t in Jan’21, on decreased shipments from Australia among others.
Meanwhile, the country’s coking coal imports from Australia registered a 22.3% reduction in the last month of February to 3.57 mn t.
Price Assessments
Latest prices for the Premium HCC and the 64 Mid Vol HCC grades are assessed at around $112.50/t (-4.3% w-o-w) and $107.50/t (-3.6% w-o-w) FOB Hay Point, Australia.
For Indian buyers, these prices amount to $135.35/t (-2.3% w-o-w) and $130.35/t (-1.6% w-o-w) respectively on CNF India basis.
Australia-India dry bulk freight rate is currently assessed at $22.85/t (+8.8% w-o-w) for delivery by Panamax vessel class.
Outlook
At present, the outlook for spot buying interest from India appears bleak, as most large steel mills rely on long-term contracts while mid- and small-sized end users are seemingly well stocked for now until May or June as they booked cargoes when PLV HCC FOB prices were at $100-105/t in early January.
Besides, Indian buyers are mostly refraining from immediate procurement of seaborne coking coal cargoes in hopes that offers could decline further.
Hence, overall demand revival for spot purchases of seaborne coking coal by Indian steel mills would likely take a while and is anticipated to start showing signs of improvement in the latter half of the next quarter at the earliest.
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By Aditya Sinha
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