Coking Coal prices continue to escalate, reaching around USD 283/MT FoB Australia of late.
In Australia, the major coal producers have declared force majeure on supplies due to the damages caused by the Debbie cyclone to the rail network, restricting coal transportation from mines to ports. Notably, the stoppage in Australian supplies has prompted the top Coking Coal consuming countries—China and Japan—to look for alternate markets, like USA and Mongolia.
The current disruption has eliminated around 15-20 MnT of Coking Coal and around 3 MnT of Non Coking Coal from the global markets.
The last highest Coking Coal price was at USD 330/MT, before six years, when Queensland was hit by a cyclone.
Source: CoalMint Research
On the other side, Thermal Coal producers in Australia are sure to take advantages of the Coking Coal supply disruption by modifying their supplies to suit the steel makers’ need. Thermal Coal, when washed removing the ash content, could be used as Semi Soft Coking Coal in steel making.
As most of the Thermal Coal mines are situated at the Hunter Valley area, which is located around 1,600 km from the New South Wales region. And, these supplies could be exported through the Newcastle port, which was unaffected by the cyclone.
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