Australian hard coking coal prices remained steady this week, amid lower price indications and relatively fewer bids.
A pair of spot transactions was concluded earlier this week for premium coking coals. A trade was concluded at $111/t FOB Australia for 75,000 t of Australian premium low-volatile (PLV) with early-June laycan. Another trade was done at $116.75/t FOB Australia for 85,000 t of Australian premium mid-volatile (PMV) with mid-June laycan.
In the last week, however, offers for premium hard coking coal had inched slightly higher due to limited tradable resources and growing buying interest from Southeast Asia and India.
The price spread between PLV and PMV hard coking coal has expanded, with FOB prices for premium low vol coals continuing to fall as lower offers failed to draw demand in the spot market, while restocking demand from Indian end-users could lend some support to PMV coals in the near term.
In China, spot activity was thin amid the lack of availability for non-Australian premium coking coals.
Healthy steel market fundamentals lend support to Indian coking coal and coke prices
In the Indian market, the downstream steel demand recovery has picked up pace on stronger construction activities. Strong domestic steel and coke prices may lend support to pre-monsoon restocking, as the monsoon season approaches in June-July.
Hence, the overall market sentiment for coking coal may stay firmer in April than March because of more procurement activities once mills have consumed existing stocks.
Furthermore, the current profit margins in major Indian steel mills are decent, which may support the imported coking coal prices.
Notably, India’s coking coal imports from Australia registered a 19.3% m-o-m growth in the last month of March to 4.26 mn t as compared against 3.57 mn t in February.
Price Assessments
Latest prices for the Premium HCC and the 64 Mid Vol HCC grades are assessed at around $110.00/t and $105/t FOB Hay Point, Australia — both prices having remained unchanged on a week-to-week basis.
For Indian buyers, these prices amount to $134.55/t (+3.4% w-o-w) and $129.55/t (+3.5% w-o-w) respectively on CNF India basis.
Australia-India dry bulk freight rate is currently assessed at $24.55/t (+21.8% w-o-w) for delivery by Panamax vessel class.
Outlook
Short-term market 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 prices were low 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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