After falling to remarkable lows, beating all expectations, Coking Coal spot prices have reversed the direction of movement on speculation of Chinese steel makers to resume active procurement.
Of late, the offer for the Premium HCC is assessed higher at USD 147/MT FoB Australia, up by USD 5.5/MT from the rate assessed the week last. Similarly, the recent offer for the 64 Mid Vol HCC is also assessed higher at USD 135.40/MT FoB Australia, an increase of USD 6.75/MT from that the week-ago.
Source: CoalMint Research
For Indian buyers, these offers translate into: USD 158/MT CFR India and USD 146.40/MT CFR India respectively.
KEY MARKET DEVELOPMENTS
Most Japanese steel producers have denounced the negotiation-based quarterly Coking Coal price settlements with Australian Coking Coal miners; and instead moved to the index-based quarterly price settlements. The index-based price settlements depend upon the average of the daily Coking Coal price indices, published by Platts and Argus Media. After Nippon Steel and Sumitomo Metal having changed its quarterly pricing methodology from negotiation-based to index-based, two other steel makers in Japan—JFE Steel and Kobe Steel—have joined the fray,reaching quarterly agreements with major Coking Coal suppliers for procuring the coal on the basis of indices published by the international agencies. It is commonly believed that indices are highly transparent because these are decided through direct negotiations.
In the meantime, market rumors of the Chinese government planning to ban the small ports in that country from imports have triggered sharp price rise for the domestic Coking Coal there. Today, Coking Coal futures in that country rose to Yuan 1,134.5/MT, the highest in the last three months. However, the exact picture on the impact on imports of the coal, if any, will be visible only after the ban coming into effect.
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