After a wave of steep rise in prices, Coking Coal prices in Australia are now reversing the path. The primary influence on the declining prices is the shrinking demand for the coal in the largest importing country—China.
The Chinese government will implement steel production cuts in that country very soon in its effort to lower atmospheric pollution.
In the first wave of the production cut, steel production will be halved in the north eastern city of Tangshan, the largest steel producing city in that country. The mandated production cut will take away 20 MnT of steel production, which is equivalent to around 7.5% of the total Chinese production. Similar production cuts will also be implemented in the other steel producing cities–Shijiazhuang, Anyang, and Handan.
Besides, it was also heard that the Chinese government will also impose restriction to lower Coking Coal production in that country by around 30%.
Due to the bearish sentiments prevailing in China, the steel makers there were forced to lower imports of Coking Coal —eroding demand for the coal in Australia.
Offers for the Premium HCC have comedown by around USD 17/MT to around USD 189.50/MT FoB Australia over the week-ago offers. Exhibiting a similar trend, offers for the 64 Mid Vol HCC have also declined by around USD 21.95/MT to around USD 153.05/MT FoB Australia in comparison with the offers in the week last.
For Indian buyers, these offers translate into: USD 202.70/MT and USD 166.25/MT respectively on CFR India basis.