The prospect of Coking Coal prices moderating due to resumption of active mining activities in the affected coal mines of Australia will eventually not materialize as the contract price for the coal during the fourth quarter of the current year has jumped to USD 200/MT FoB Australia.
In a recent development, Japanese steel maker—Nippon Steel and Sumitomo Metal Corporation—has agreed with the global energy major—Peabody Energy—to buy Coking Coal from the latter at USD 200/MT FoB Australia during the fourth quarter of 2016. This is the highest contract price for the coal since 2012; and is also significantly high in comparison with that in the third quarter, at USD 92.50/MT FoB Australia.
The level of contract price indicates that prices of the coal will remain above the USD 200/MT FoB mark during the last quarter of 2016.
Spot prices of the coal have already been above USD 200/MT FoB due to supply disruptions in Australia as well as in China.
On 11 Oct’16, spot price of the Premium Hard Coking Coal was reported at USD 218.10.MT FoB Australia.
During the last few days, resumption of mining activities in Australia have had brought in hopes of the price coming down among buyers. A section of Indian buyers also have expected the price to decline to around USD 150/MT FoB by Nov’16.
However, the recent contract price has clearly indicated the price will remain above USD 200/MT FoB during the rest of the months in 2016.
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